Analysis of Congressional Budget Office Budget and Economic Outlook for 2013-2023

| Economy | Douglas Holtz-Eakin, Gordon Gray
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Today, the Congressional Budget Office (CBO) released its Budget and Economic Outlook for 2013-2023. This release is particularly significant in light of recent events. First, for the first time in over ten years, the current-law baseline offers a fairly reasonable projection of what the nation’s budget pathway will really look like. With the enactment of the recent “Fiscal cliff” tax deal, current tax law is relatively stable – that is, largely free of scheduled expirations that, at least to some degree, will not be allowed to actually occur. And second, given the recent and ongoing debate about the nation’s fiscal policy, the baseline should presumably offer insight into the extent to which existing deficit reduction measures (the Budget Control Act (BCA) and the tax increases embedded in the American Taxpayer Relief Act (ATRA)) have improved the federal government’s finances. Unfortunately, CBO’s baseline confirms that the nation, despite claims to the contrary, remains on a damaging debt pathway.

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