2016 State of the Budget
WASHINGTON, DC – The Senate Budget Committee today released its February 2, 2016, Budget Bulletin focused on the 2016 State of the Budget. The Budget Bulletin provides regular expert articles by Senate Budget Committee analysts on the issues before Congress relating to the budget, deficits, debt, and the economy.
Read the full Senate Budget Bulletin here.
Excerpts follow:
2016 Budget Resolution Status Report
Last year Congress adopted S. Con. Res. 11, the Concurrent Resolution on the Budget for Fiscal Year 2016. This achievement marked the first bicameral budget resolution since calendar year 2009 and the first 10-year balanced budget since calendar year 2001. The 2016 budget offered a path to balance without raising taxes, updated and expanded budget enforcement tools, and provided reconciliation instructions that were ultimately used to repeal the Affordable Care Act.
Bipartisan Budget Act of 2015
Ultimately, Congress crafted another two-year spending deal, the Bipartisan Budget Act of 2015, modeled after the 2013 Ryan-Murray spending agreement. The 2015 budget bill, signed into law on November 2, increased discretionary spending levels preventing them from facing the full extent of fiscal discipline imposed under the BCA. To date, discretionary spending has never fully been enforced at BCA levels, as the American Taxpayer Relief Act, the Bipartisan Budget Act of 2013, and the Bipartisan Budget Act of 2015 have either reduced sequestration levels (2013) or replaced BCA spending caps with new levels (2014-2017).
CBO’s Budget Outlook: A Challenging Fiscal Environment
With CBO’s latest update, combined deficits are now $1.5 trillion higher than projected just six months ago. CBO estimates that about half the change is attributable to legislative activity, particularly the tax provisions of the appropriations bill. The remaining increase in the deficit is attributable to CBO’s economic forecast of lower growth, inflation, interest, and unemployment rates, which both decrease forecasted revenues and decrease outlays, and changes in technical assumptions. Changes in CBO’s economic forecast account for $437 billion of projected deficit increases. The technical changes, which would increase deficits by $363 billion, are pegged to increased Medicaid enrollment due to newly eligible beneficiaries under the ACA and substantial increases in veterans’ disability compensation.
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