Skip Navigation

This analysis of the President's budget for fiscal year 1998 was prepared at the request of the Senate Committee on Appropriations. It was produced by the staffs of the Budget Analysis, Macroeconomic Analysis, and Tax Analysis divisions under the supervision of Paul Van de Water, Robert Dennis, and Rosemary D. Marcuss. James Horney wrote Chapter 1, Juann Hung wrote Chapter 2, Daniel Kowalski wrote Chapter 3, and Richard Kasten wrote Chapter 4. Appendix A was written by Jeffrey Holland, and Appendix B was written by John Peterson and James Horney, with assistance from Laurie Brown. The baseline revenue estimates were prepared under the direction of Richard Kasten. The estimates of the President's revenue proposals were prepared by the Joint Committee on Taxation. The principal contributors to the revenue and spending estimates and analyses are listed in Appendix C.

Paul L. Houts supervised the editing and production of the report. Major portions were edited by Paul L. Houts, Sherwood Kohn, and Christian Spoor. Marlies Dunson provided editorial assistance. The authors owe thanks to Marion Curry, Linda Harris, Denise Jordan, Dorothy Kornegay, and Simone Thomas, who assisted in producing sections of the report. Kathryn Quattrone and Jill Sands prepared the entire report for publication.
 

June E. O'Neill
Director
March 1997
 
 

ONE - SUMMARY AND INTRODUCTION

• The President's Basic Budgetary Policies
• The President's Alternative Budgetary Policies
• CBO's Revised Baseline

TWO - ECONOMIC ASSUMPTIONS

• Real GDP Growth
• Unemployment
• Inflation
• Interest Rates
• Incomes
• Conclusion

THREE - THE PRESIDENT'S SPENDING PROPOSALS

• The President's Basic Spending Proposals
• The President's Alternative Spending Proposals

FOUR - THE PRESIDENT'S REVENUE PROPOSALS

• Tax Relief for Middle-Income Families
• Other Tax Reductions
• Provisions Reinstating Expired Taxes
• Other Provisions That Would Increase Revenues

APPENDIXES

A - CBO Baseline Budget Projections
B - Comparing the Accuracy of Forecasts by CBO and the Clinton Administration
C - Major Contributors to the Revenue and Spending Projections
 

TABLES
1.	CBO Estimate of the Effect on the Deficit of the President's Basic Budgetary Policies
2.	CBO Reestimate of the President's Basic Budgetary Policies
3.	Estimate of the President's Alternative Policies to Eliminate the Deficit Under CBO Assumptions
4.	CBO Estimate of the Effect on the Deficit of the President's Alternative Budgetary Policies
5.	Comparison of Economic Projections, Calendar Years 1996-2002
6.	CBO Estimate of the President's Basic Spending Proposals
7.	Comparison of CBO's Estimate of the President's Discretionary Spending Proposals with the Limits for 1998
8.	Discretionary Spending for 1998 Under the President's Proposals
9.	Discretionary Outlay Levels as Estimated by CBO
10.	CBO Estimate of the President's Basic Mandatory Spending Proposal
11.	CBO Estimate of the President's Medicare Proposal
12.	CBO Estimate of the President's Medicaid Proposals
13.	Estimate of the President's Alternative Spending Proposals to Eliminate the Deficit Under CBO Assumptions
14.	CBO Estimate of the President's Alternative Spending Proposals
15.	CBO Estimate of Revenues Under the President's Proposals
16.	Comparison of Revenue Estimates of the President's Proposals
17.	Comparison of Revenue Estimates of the President's Provisions That Would Reduce Revenues
18.	Comparison of Revenue Estimates of the President's Provisions That Would Increase Revenues
A-1.	Changes in CBO Deficit Projections Since January
A-2.	CBO Deficit Projections
A-3.	CBO Baseline Budget Projections, Assuming Compliance with Discretionary Spending Caps
A-4.	CBO Baseline Projections of Mandatory Spending, Including Deposit Insurance
A-5.	CBO Baseline Projections of Federal Debt and Interest Costs
A-6.	Changes in the Deficit Resulting from the Economic Effects of Balancing the Budget by 2002
B-1.	Administration and CBO Current-Policy Deficit Projections
B-2.	Accuracy of Administration and CBO Economic Assumptions Since 1993, by Economic Indicator
B-3.	Administration and CBO Projections of Nominal GDP Growth
B-4.	Administration and CBO Projections of Real GDP Growth
B-5.	Administration and CBO Projections of Growth in the GDP Price Index
B-6.	Administration and CBO Projections of CPI-U Inflation
B-7.	Administration and CBO Projections of Incomes
B-8.	Administration and CBO Projections of the Unemployment Rate
B-9.	Administration and CBO Projections of the Three-Month Treasury Bill Rate
B-10.	Administration and CBO Projections of the Ten-Year Treasury Note Rate
FIGURES
1.	Difference Between the Growth of the CPI-U and the GDP Price Index
2.	Incomes
3.	Labor Income
4.	Wages and Salaries as a Share of Labor Income
5.	Capital Income
6.	Corporate Profits as a Share of Capital Income 16
BOXES
1.	Projections of the Difference Between the Growth of the CPI and the Growth of the GDP Price Index
2.	Budgetary Effects of the President's Proposals for the District of Columbia
3.	Status of the Hospital Insurance Trust Fund Under the President's Medicare Proposals 28

---