The Budget and Economic Outlook: An Update
August 2007
Unless otherwise indicated, all years referred to in describing the economic outlook are calendar years; otherwise, the years are federal fiscal years (which run from October 1 to September 30).
Numbers in the text and tables may not add up to totals because of rounding.
Some of the figures use shaded vertical bars to indicate periods of recession. (A recession extends from the peak of a business cycle to its trough.)
Data from the Commerce Department's Bureau of Economic Analysis (BEA) on gross domestic product and the national income and product accounts are generally as of June 2007. BEA's revised estimates, released on July 27, 2007, were published too late to be incorporated into the Congressional Budget Office's (CBO's) current economic forecast. Consequently, in Chapter 2, tables incorporate the June 2007 data, but figures and discussions of recent events are consistent with the revised data. The revisions to the national income and product accounts are unlikely to have a major impact on the projections presented in this volume.
Supplemental data for this analysis are available on CBO's Web site.
Preface
This volume is one of a series of reports on the state of the budget and the economy that the Congressional Budget Office (CBO) issues each year. It satisfies the requirement of section 202(e) of the Congressional Budget Act of 1974 for CBO to submit to the Committees on the Budget periodic reports about fiscal policy and to provide baseline projections of the federal budget. In accordance with CBO's mandate to provide impartial analysis, the report makes no recommendations.
The baseline spending projections were prepared by the staff of the agency's Budget Analysis Division under the supervision of Robert Sunshine (who has now become Deputy Director of CBO), Peter Fontaine, Janet Airis, Thomas Bradley, Kim Cawley, Paul Cullinan, Jeffrey Holland, and Sarah Jennings. The revenue estimates were prepared by the staff of the Tax Analysis Division under the supervision of Thomas Woodward, Frank Sammartino, Mark Booth, and David Weiner, with assistance from the Joint Committee on Taxation. (A detailed list of contributors to the revenue and spending projections appears in Appendix D.)
The economic outlook presented in Chapter 2 was prepared by the Macroeconomic Analysis Division under the direction of Robert Dennis, Kim Kowalewski, and John F. Peterson. Robert Arnold and Christopher Williams carried out the economic forecast and projections. David Brauer, Ufuk Demiroglu, Naomi Griffin, Juann Hung, Kim Kowalewski, Mark Lasky, Angelo Mascaro, John F. Peterson, Frank Russek, and Steven Weinberg contributed to the analysis. Eric Miller and Adam Weber provided research assistance.
CBO's Panel of Economic Advisers commented on an early version of the economic forecast underlying this report. Members of the panel are Richard Berner, Jared Bernstein, Michael Boskin, Martin Feldstein, Robert J. Gordon, Robert E. Hall, Lawrence Katz, Allan H. Meltzer, Laurence H. Meyer, William D. Nordhaus, Rudolph G. Penner, Adam S. Posen, James Poterba, Alice Rivlin, Nouriel Roubini, Diane C. Swonk, and Stephen P. Zeldes. Alan Auerbach, Robert Dugger, Karen Dynan, Douglas Elmendorf, and Brian Sack attended the panel's meeting as guests. Although CBO's outside advisers provided considerable assistance, they are not responsible for the contents of this report.
Jeffrey Holland wrote the summary. Barry Blom, with assistance from Barbara Edwards and Pamela Greene, wrote Chapter 1 (David Newman compiled Box 1-1). John F. Peterson, with assistance from Kim Kowalewski, authored Chapter 2. Ann Futrell and Eric Schatten, along with Mark Booth, wrote Appendix A. Amber Marcellino, with assistance from Pamela Greene, wrote Appendix B. Eric Miller and Adam Weber compiled Appendix C.
Christine Bogusz, Christian Howlett, Kate Kelly, Loretta Lettner, and John Skeen edited the report. Marion Curry, Denise Jordan-Williams, and Linda Lewis Harris assisted in its preparation. Maureen Costantino took the photograph for the cover and prepared the report for publication. Lenny Skutnik printed the initial copies, and Linda Schimmel handled the distribution. Simone Thomas prepared the electronic version for CBO's Web site.
August 2007
