The Federal Budget
The Congressional Budget Office projects that, under current tax and spending policies, the federal budget will show a small total deficit in fiscal years 2002 ($21 billion) and 2003 ($14 billion). This is a far cry from the $176 billion and $172 billion surpluses projected as late as last August. Indeed, since January 2001, the cumulative 10-year (2002–2011) estimated surplus has plummeted from $5.6 trillion to just $1.6 trillion. Of this decline, $2.4 trillion can be traced to policies enacted in 2001, about half of it resulting from increased outlays (including debt service) and the rest from reduced revenues. A revision to projected economic performance on the heels of the 2001 recession contributed almost $1 trillion more to the decline, mostly by reducing projected revenues. The remaining drop in the 10-year estimated surplus is attributable to unanticipated factors and changes in projection methods.
Suggested citation: "The Federal Budget," Federal Reserve Bank of Cleveland, Economic Trends, no. 02-03, pp. 13, 03.01.2002.