On March 7, the Congressional Budget Office (CBO) released its annual report analyzing the effects on revenue and spending of the President’s budget proposals. The report was yet another blow to the President’s proposals for additional tax cuts.

The Committee for Economic Development (CED), an influential organization of business leaders and educators, released a report on March 5, 2003, titled "Exploding Deficits, Declining Growth: The Federal Budget and the Aging of America."

Included among its questionable first actions in the 108th Congress, the Republican-led House Ways and Means Committee made two new troubling rule changes that will govern House legislation around the federal budget.

The Congressional Budget Office’s (CBO) Monthly Budget Review reports that the $137 billion drop in revenue for FY 2002 represents the largest one-year drop in 50 years. The combination of this reduction in revenue and the increase in spending in response to last year’s terrorist attacks, the increase in the unemployment rate, and steep increases in Medicaid costs amounted to a $157 billion deficit for FY 2002, which ended September 30. Though this return to a deficit represents a $254 billion turn-around from last year’s $127 billion surplus, the deficit is only 1.5 percent of GDP, a manageable size and a great deal smaller than the deficits of the mid-1980’s, which amounted to 6 percent of GDP. For an overview of CBO’s report on what happened to the surplus, see this OMB Watcher article.