Skip Navigation

The Congressional Budget Office (CBO) is required by section 202(f) of the Congressional Budget Act of 1974 to submit an annual report on budgetary options to the House and Senate Committees on the Budget. This year, the report is in three parts: The Outlook for Economic Recovery, Baseline Budget Projections for Fiscal Years 1984-1988, and Reducing the Deficit; Spending and Revenue Options.

Part II, Baseline Budget Projections for Fiscal Years 1984-1988, presents projections of federal revenues and spending that could occur if current laws and policies were to continue unchanged for the next five years. The projections do not represent a forecast of future federal budgets, since those budgets will doubtless include numerous policy changes. They do provide, however, a useful baseline or benchmark against which proposed changes in taxes or spending programs may be measured and assessed.

The Congressional Budget Office is required under section 308(c) of the Congressional Budget Act to issue a report each year that projects new budget authority, outlays, and revenues for the next five years. This report fulfills that statutory requirement for fiscal years 1984 to 1988. The Congressional Budget Act also requires CBO to project tax expenditures for each of the next five fiscal years. A separate report on tax expenditure projections will be issued at a later date.

The baseline budget projections were prepared by staff of the Budget Analysis and Tax Analysis Divisions, under the supervision of James L. Blum and James M. Verdier. The principal authors were Paul N. Van de Water, Rosemary D. Marcuss (Chapter III), and Charles J. Richardson (Chapter V). Robert L. Faherty and Francis S. Pierce edited the manuscript, assisted by Nancy Brooks. David A. Bashore prepared the report for publication.
 

Alice M. Rivlin
Director
February 1983
 
 

SUMMARY

CHAPTER I. INTRODUCTION

• The Baseline Concept
• The Use of Baseline Projections
• Plan of This Report

CHAPTER II. OVERVIEW OF THE PROJECTIONS

• Economic Assumptions
• Baseline Budget Projections
• Alternative Economic Assumptions
• Comparison of 1983 and 1981 Baseline Projections

CHAPTER III. BASELINE REVENUE PROJECTIONS

• Definition of Baseline Revenues
• The Changing Federal Tax Structure
• Effect of Recession and Tax Law Changes on Revenue Projections

CHAPTER IV. BASELINE SPENDING PROJECTIONS

• National Defense Programs
• Entitlements and Other Mandatory Spending
• Nondefense Discretionary Spending
• Net Interest
• Offsetting Receipts
• Off-Budget Federal Entities
• Effect of Recession and Tax Law Changes on Outlay Projections

CHAPTER V. BASELINE CREDIT PROJECTIONS

• Credit Definitions and Assumptions
• Credit Projections

APPENDIX A. BASELINE SPENDING PROJECTIONS BY FUNCTIONAL AND MAJOR PROGRAM CATEGORY

APPENDIX B. BASELINE SPENDING PROJECTIONS BY COMMITTEE JURISDICTION

APPENDIX C. FEDERAL RECEIPTS AND EXPENDITURES IN THE NATIONAL INCOME ACCOUNTS

APPENDIX D. BASELINE SPENDING CONCEPTS AND ASSUMPTIONS

APPENDIX E. BASELINE REVENUE CONCEPTS AND ASSUMPTIONS

APPENDIX F. BASELINE CREDIT PROJECTIONS BY FUNCTION
 

TABLES
1.	BASELINE ECONOMIC ASSUMPTIONS
2.	BASELINE BUDGET PROJECTIONS
3.	PROJECTIONS OF FEDERAL GOVERNMENT DEBT
4.	ALTERNATIVE ECONOMIC ASSUMPTIONS
5.	BASELINE BUDGET PROJECTIONS UNDER ALTERNATIVE ECONOMIC ASSUMPTIONS
6.	DIFFERENCES BETWEEN JULY 1981 AND FEBRUARY 1983 BASELINE DEFICIT PROJECTIONS
7.	COMPARISON OF JULY 1981 AND FEBRUARY 1983 BASELINE ECONOMIC ASSUMPTIONS
8.	DIFFERENCES BETWEEN JULY 1981 AND FEBRUARY 1983 BASELINE DEFICIT PROJECTIONS ATTRIBUTABLE TO LEGISLATIVE ACTION
9.	BASELINE REVENUE PROJECTIONS BY SOURCE
10.	FEDERAL REVENUES BY SOURCE, AS A PERCENTAGE OF GNP AND OF TOTAL REVENUES
11.	REVENUE EFFECTS OF THE ECONOMIC RECOVERY TAX ACT OF 1981
12.	REVENUE EFFECTS OF THE TAX EQUITY AND FISCAL RESPONSIBILITY ACT OF 1982
13.	REVENUE INCREASES DUE TO INCREASES IN SOCIAL SECURITY TAX RATES
14.	COMPARISON OF CBO 1981 AND 1983 BASELINE REVENUE PROJECTIONS
15.	BASELINE OUTLAY PROJECTIONS FOR MAJOR SPENDING CATEGORIES
16.	BASELINE OUTLAY PROJECTIONS FOR NATIONAL DEFENSE
17.	ALTERNATIVE LEVELS OF DEFENSE SPENDING
18.	BASELINE OUTLAY PROJECTIONS FOR ENTITLEMENTS AND OTHER MANDATORY SPENDING
19.	SOURCES OF GROWTH IN ENTITLEMENTS AND OTHER MANDATORY SPENDING PROGRAMS
20.	NONDEFENSE DISCRETIONARY SPENDING
21.	SOURCES OF GROWTH IN NONDEFENSE DISCRETIONARY SPENDING PROGRAMS
22.	NET INTEREST OUTLAYS UNDER ALTERNATIVE ASSUMPTIONS
23.	BASELINE PROJECTIONS OF OFFSETTING RECEIPTS
24.	BASELINE OUTLAY PROJECTIONS FOR OFF-BUDGET FEDERAL ENTITIES
25.	DIFFERENCES BETWEEN JULY 1981 AND FEBRUARY 1983 BASELINE OUTLAY PROJECTIONS
26.	BASELINE CREDIT PROJECTIONS
27.	BASELINE PROJECTIONS OF NET DIRECT LOAN OBLIGATIONS AND PRIMARY LOAN GUARANTEE COMMITMENTS BY PURPOSE OF LOAN
A-1.	BASELINE BUDGET AUTHORITY PROJECTIONS BY FUNCTION
A-2.	BASELINE OUTLAY PROJECTIONS BY FUNCTION
A-3.	BASELINE OUTLAY PROJECTIONS BY MAJOR PROGRAM CATEGORY
B-1.	TRENDS IN SPENDING BY HOUSE COMMITTEE JURISDICTION
B-2.	BASELINE BUDGET PROJECTIONS BY HOUSE COMMITTEES WITH SPENDING JURISDICTION
B-3.	BASELINE BUDGET PROJECTIONS BY SENATE COMMITTEES WITH SPENDING JURISDICTION
B-4.	BASELINE BUDGET PROJECTIONS BY HOUSE COMMITTEES WITH AUTHORIZING JURISDICTION
B-5.	BASELINE BUDGET PROJECTIONS BY SENATE COMMITTEES WITH AUTHORIZING JURISDICTION
C-1.	PROJECTIONS OF BASELINE REVENUES AND OUTLAYS ON A NATIONAL INCOME ACCOUNTS BASIS
D-1.	MAJOR TEMPORARY COST-SAVING PROVISIONS
D-2.	BASELINE PROJECTIONS FOR NATIONAL DEFENSE
D-3.	PROGRAMMATIC COMPONENT OF THE DEFENSE BASELINE BY DEFENSE PLANNING AND PROGRAMMING CATEGORY IN CURRENT DOLLARS
D-4.	PROGRAMMATIC COMPONENT OF THE DEFENSE BASELINE BY DEFENSE PLANNING AND PROGRAMMING CATEGORY IN CONSTANT 1983 DOLLARS
D-5.	ACTIVE MILITARY AND CIVILIAN PERSONNEL IN THE PROGRAMMATIC COMPONENT OF THE DEFENSE BASELINE
D-6.	MAJOR ACTIVE FORCE LEVELS USED IN THE PROGRAMMATIC COMPONENT OF THE DEFENSE BASELINE
D-7.	MAJOR PROCUREMENT PROGRAMS CONTAINED IN THE PROGRAMMATIC COMPONENT OF THE DEFENSE BASELINE
E-1.	TAX PROVISIONS EXPIRING DURING 1983-1988 PERIOD
F-1.	BASELINE CREDIT PROJECTIONS BY BUDGET FUNCTION
FIGURES
1.	MAJOR ECONOMIC ASSUMPTIONS
2.	FEDERAL REVENUES AND OUTLAYS AS A PERCENTAGE OF GNP
3.	FEDERAL DEBT HELD BY THE PUBLIC AS A PERCENTAGE OF GNP
4.	FEDERAL DEFICIT UNDER ALTERNATIVE ECONOMIC ASSUMPTIONS
5.	THE COMPOSITION OF FEDERAL REVENUES
6.	REVENUE SOURCES AS A PERCENTAGE OF GNP
7.	INDIVIDUAL INCOME TAXES AS A PERCENTAGE OF TAXABLE PERSONAL INCOME
8.	CORPORATE INCOME TAX AS A PERCENTAGE OF ECONOMIC PROFITS
9.	THE COMPOSITION OF GROSS FEDERAL SPENDING
10.	OUTLAY CATEGORIES AS PERCENTAGES OF GNP
11.	ENTITLEMENT SPENDING
12.	FEDERAL CREDIT AS A PERCENTAGE OF GNP

 

Each year, the Congress makes numerous decisions about how laws and policies affecting the budget should be changed to meet fiscal policy goals and national needs. In making these decisions, a useful starting point is to know what might happen to the budget under current laws and policies. This report provides such an assessment. The baseline budget projections that it presents are not a forecast of future budget outcomes, but they are a useful analytical tool for budget decisionmaking.

Again this year, the principal feature of the baseline budget projections is large and growing deficits. As a result of the current deep recession and the high level of unemployment, the federal budget deficit is expected to reach a new postwar high of $194 billion in fiscal year 1983. Under the Congressional Budget Office's (CBO's) baseline economic assumptions, and assuming no change in current taxing and spending policies, the unified budget deficit is projected to grow steadily to $197 billion in 1984, $214 billion in 1985, and $267 billion in 1988 (see Summary Figure 1), despite projected economic recovery.

This document is available in its entirety in PDF.