Measuring the Effects of the Business Cycle on the Federal Budget: An Update
"In August 2009, the Congressional Budget Office (CBO) released its most recent
baseline projections of federal revenues, outlays, and budget balances for the next
10 fiscal years.1 CBO develops its projections through a process that assumes the continuation of the laws and policies that affect taxes and mandatory spending programs
and that extrapolates the growth of discretionary spending by using projected rates of
inflation. According to CBO’s projections, under current tax and spending policies,
the budget deficit would increase from $459 billion in 2008 to $1.6 trillion in 2009
and then fall to $1.4 trillion in 2010 and to $921 billion in 2011..."