Forecast sees sunny skies on budget front

tshoop@govexec.com

The Congressional Budget Office estimated Wednesday that federal budget surpluses could total as much as $1.9 trillion over the next decade.

"The budgetary picture is a bright one," said CBO Director Dan Crippen in testimony before the Senate Budget Committee.

Crippen cautioned, however, that while CBO can make estimates with confidence about mandatory federal spending and revenues, it is more difficult to project the future of discretionary spending. Congress set caps on discretionary spending in the 1997 Balanced Budget Act, but could lift those caps at any time. Both President Clinton and Republicans in Congress have shown an interest recently in lifting the caps.

To take into account uncertainty about discretionary spending, CBO issued three different projections: an "inflated" baseline, assuming that budget authority for discretionary programs grows at the rate of inflation after this year; a "freeze" figure that pegs discretionary authority to levels established for fiscal 2000; and a "capped" variation, assuming that discretionary spending equals CBO's estimates of statutory caps through 2002 and grows at the rate of inflation after that.

Under the "inflated" baseline, surpluses totaled more than $800 billion. The two other baselines resulted in surplus projections of $1.9 trillion.

House Democrats immediately criticized the CBO's figures, according to an Associated Press report. The Democrats charged that the $1.9 trillion figure unrealistically assumes that Congress will continue to enforce the budget caps.

Crippen noted that the "freeze" baseline "ignores the effects of [federal] pay raises and inflation-costs that could erode the amount of services or programs the government can deliver."

In light of the CBO projections, President Clinton said he will propose paying off the $3.6 trillion total federal debt by 2013, two years earlier than the date House Republicans have floated in connection with a budget plan they are developing.

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