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Mr. Chairman and Members of the Committee:

This morning we are releasing our report on Five-Year Budget Projections: Fiscal Years 1979-1983, I ask permission that the report be entered in the record.

The primary purpose of CBO's current policy projections is to provide a neutral baseline for evaluating the effects of new proposals on the long-run size and shape of the budget. As you know, the projections are estimates for five years ahead of federal spending and revenues under current policies, adjusted for demographic and economic changes in those five years. The impact of new legislation on spending or revenues can be added to or subtracted from this current policy base. This year, in addition to estimating the effects of economic change on the budget, CBO has made estimates of the amount of additional spending or tax cuts likely to be required to sustain for five years the economic growth objectives adopted in the Second Concurrent Resolution on the Budget for Fiscal Year 1978.

My testimony today will focus on three areas: (1) a summary of the CBO current policy projections of receipts and outlays; (2) estimates of the tax cuts or spending increases that would be required if the economy were to continue to grow at the rates assumed in the second concurrent resolution; and (3) a brief discussion of how five-year projections might be useful in the formulation of multiyear budgetary targets.

This document is available in its entirety in PDF.