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FISCAL YEAR 2012

MID-SESSION REVIEW
BUDGET OF THE U.S. GOVERNMENT

OFFICE OF MANAGEMENT AND BUDGET
BUDGET.GOV

FISCAL YEAR 2012

MID-SESSION REVIEW
BUDGET OF THE U.S. GOVERNMENT

OFFICE OF MANAGEMENT AND BUDGET

EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON D. C. 20503

THE DIRECTOR

September 1, 2011
The Honorable John A. Boehner
Speaker of the House of Representatives
Washington, DC 20510
Dear Mr. Speaker:
Section 1106 of Title 31, United States Code, requests that the President send to the Congress
a supplemental update of the Budget that was transmitted to the Congress earlier in the year.
This supplemental update of the Budget, commonly known as the Mid-Session Review, contains
revised estimates of receipts, outlays, budget authority, and the budget deficit for fiscal years
2011 through 2021.
Sincerely,

Jacob J. Lew
Director

Enclosure

Identical Letter Sent to the President of the Senate

TABLE OF CONTENTS

Page

List of Tables��������������������������������������������������������������������������������������������������������������������������������������������� iii
Summary�����������������������������������������������������������������������������������������������������������������������������������������������������1
Economic Assumptions�������������������������������������������������������������������������������������������������������������������������������7
Receipts�����������������������������������������������������������������������������������������������������������������������������������������������������15
Expenditures���������������������������������������������������������������������������������������������������������������������������������������������19
Summary Tables���������������������������������������������������������������������������������������������������������������������������������������23

i

LIST OF TABLES

Page

Table 1.	

Changes in Deficits from the February Budget �����������������������������������������������������������������6

Table 2.	

Economic Assumptions ������������������������������������������������������������������������������������������������������9

Table 3.	

Comparison of Economic Assumptions ����������������������������������������������������������������������������12

Table 4.	

Alternative Economic Forecast �����������������������������������������������������������������������������������������13

Table 5.	

Change in Receipts ������������������������������������������������������������������������������������������������������������17

Table 6.	

Change in Outlays �������������������������������������������������������������������������������������������������������������22

Table S–1.	

Budget Totals ���������������������������������������������������������������������������������������������������������������������24

Table S–2.	

Effect of Budget Proposals on Projected Deficits �������������������������������������������������������������25

Table S–3.	

Adjusted Baseline by Category �����������������������������������������������������������������������������������������26

Table S–4.	

Proposed Budget by Category �������������������������������������������������������������������������������������������28

Table S–5.	

Proposed Budget by Category as a Percent of GDP ��������������������������������������������������������30

Table S–6.	

Proposed Budget in Population- and Inflation-Adjusted Dollars �����������������������������������32

Table S–7.	

Bridge from Budget Enforcement Act Baseline to Adjusted Baseline ����������������������������34

Table S–8.	

Change in the Adjusted Baseline from Budget to MSR ��������������������������������������������������35

Table S–9.	

Mandatory and Receipt Proposals from the February Budget ���������������������������������������37

Table S–10.	 Outlays for Mandatory Programs under Current Law ���������������������������������������������������51
Table S–11.	 Funding Levels for Appropriated (“Discretionary”) Programs by Category ������������������52
Table S–12. Federal Government Financing and Debt ������������������������������������������������������������������������53

iii

SUMMARY
This Mid-Session Review (MSR) updates
the Administration’s estimates for outlays, receipts, and the deficit for economic, legislative,
and other changes that have occurred since
the President’s 2012 Budget was released in
February. The 2011 deficit is now projected to
be $1.316 trillion, $329 billion or 20 percent
lower than the $1.645 trillion deficit projected
in February, due to a combination of higher-than-expected receipts and lower-thanexpected outlays. As a percentage of gross
domestic product (GDP), the deficit is now
projected to equal 8.8 percent, down from 10.9
percent projected in February. The deficits for
each of the following 10 years are also projected to be lower than previously projected, with
a total reduction of $1.45 trillion over the 10year period. This reduction results primarily
from the terms of the Budget Control Act of
2011, which the President signed on August
2. The Budget Control Act lowers future deficits by establishing caps on annually appropriated (“discretionary”) spending each year
from 2012 through 2021. It also established
a process for achieving further deficit reduction with the creation of a bipartisan, bicameral congressional committee (the Joint Select
Committee on Deficit Reduction) tasked with
recommending spending and revenue proposals that yield $1.5 trillion in deficit reduction
over the 10-year period, about $500 billion in
deficit reduction beyond the proposals laid out
in the President’s Budget.
As described more fully below, the work
of the Joint Committee is critical to achieving fiscal sustainability. What is more, the
Committee’s already difficult task will be
made even more challenging by the fact that
its recommendations will need to take into
consideration the current economic climate.
On the one hand, due to extraordinary policy efforts, the economy already has made
substantial progress recovering ground lost
during the financial crisis and subsequent
18-month recession. Between the middle of
2009 and the end of 2010, the economy grew
for six consecutive quarters, with real GDP
rising at an average annual rate of 3 percent;
after shedding 8.8 million jobs over the previous two years, the private sector created 1.3
million new jobs in 2010; the financial system

is no longer in crisis; credit and capital markets have returned to normal levels; and the
cost of stabilizing the financial and automobile sectors has amounted to a fraction of initial estimates. On the other hand, the recession was deeper than originally reported, and
the headwinds the economy has encountered
are stronger than anticipated. First, revised
estimates showed that the recession included the worst six-month period of contraction
since quarterly data has been collected, falling at an average annualized rate of 7.8 percent in the fourth quarter of 2008 and the first
quarter of 2009.
Second, 2011 has seen drags on the economy in the form of a sharp rise in oil prices, the
disruption to global supply chains as a result
of the earthquake in Japan, a slowdown of
growth in Europe, a sluggish rebound in the
housing market, and uncertainty surrounding congressional action on the debt ceiling,
all of which have delayed the recovery further.
In sum, economic growth and job creation,
while positive, have not been strong enough
to bring down the unemployment rate to an
acceptable level.
That is why, in addition to the actions that
were taken at the depth of the financial crisis, the Administration has taken significant
steps to strengthen the recovery. On December
17, 2010, the President signed into the law
the bipartisan Tax Relief, Unemployment
Insurance Reauthorization, and Job Creation
Act, which prevented a tax increase on middle-class Americans, cut payroll taxes for 159
million workers, extended unemployment
benefits for 7 million unemployed Americans,
and provided a series of tax incentives to businesses to spur growth. These measures have
helped buffer the economy against recent
headwinds—for example, by providing households with a significant boost to their income
that has helped to offset the increase in gasoline prices. Moreover, in constructing the 2012
Budget, the President laid out a plan for significant deficit reduction even while ensuring
that these efforts did not threaten the recovery and maintaining investments in the elements critical to long-term economic growth:
clean energy, innovation, education, and in1

2
frastructure. In the long run, only by living
within our means will we be able to make the
investments necessary to win the future in a
competitive global economy.
THE 2012 BUDGET AND
SUBSEQUENT DEVELOPMENTS
Accordingly, in February, the President’s
2012 Budget provided a significant down payment on the deficit reduction that we need to
take, including proposing $1 trillion in deficit
reduction over the next 10 years on top of the
$2 trillion in projected savings from winding
down operations in Afghanistan and Iraq and
the expiration of the high-income tax cuts
passed in 2001 and 2003. That Budget would
have reduced the deficit to 3 percent of GDP
by the middle of the decade and sustained
that level for many years thereafter. By reducing the deficit to this size in relation to
the economy, we no longer would be adding
to the Government’s debt burden through additional Federal spending, but would instead
be achieving what economists call “primary
balance.” At the same time, the 2012 Budget
included investments in areas critical to winning the future: education, innovation, clean
energy, and infrastructure.
Since the 2012 Budget was released, there
have been three significant developments
that affect both the budget itself and fiscal
policy generally. First, on April 15, 2011, the
President signed into law the Department
of Defense and Full-Year Continuing
Appropriations Act, 2011, to provide for appropriations for the rest of fiscal year 2011.
This legislation cut discretionary spending by roughly $80 billion relative to the
President’s 2011 Budget request. In nominal terms, these were the largest one-year
cuts in history. Cuts of this magnitude entailed not only eliminating wasteful and duplicative programs, but also making cuts to
programs that the Administration supports
and would not have made if not for the fiscal situation. For instance, the new funding
levels set in this agreement mean delaying
the goal of doubling funding for key research
and development (R&D) agencies along
with ambitious goals set for the Nation in
the President’s Budget in the areas of global
health and international development. At
the same time, this legislation allowed for
continued investments in education, inno-

MID-SESSION REVIEW

vation, and critical health programs and did
not include many extraneous, ideological
provisions that many in Congress desired
that would have, for example, damaged important efforts to reform our financial system and improve the quality and accessibility of affordable health care.
Second, after the
2011 appropriations
were finally completed, the President looked
again to the future and presented a revised
fiscal framework, building on the Budget request, that laid out a comprehensive and balanced strategy to cut spending, bring down
Government debt, increase confidence in
our Nation’s fiscal strength, and support our
economic recovery while making the investments we need to win the future. Altogether,
the plan would have reduced the deficit by $4
trillion over 12 years. The framework would
have saved approximately $770 billion over
12 years in non-security discretionary spending and sought to save $400 billion in security
discretionary spending after a comprehensive
review of our military’s role, missions, and capabilities. In health care—a key driver of our
long-term deficits—the framework identified
changes to Medicare and Medicaid that would
build on the efficiencies in the Affordable
Care Act (ACA), saving $340 billion by 2021
and at least $1 trillion in the subsequent decade, while strengthening these programs for
future generations. The framework also included a target of $360 billion in other mandatory savings by 2023. With respect to taxes,
the plan called for cutting tax expenditures
in order to lower tax rates while still reducing the deficit. The framework also reiterated
the President’s position that the 2001 and
2003 tax cuts for those in the top 2 percent of
earners should expire. Finally, the President
called for a “debt failsafe” trigger to ensure a
decline in Government debt as a share of the
economy. Specifically, the President proposed
a trigger that would require, by the second
half of the decade, our Nation’s debt to be on
a declining path as a share of our economy. If
that target were not met by 2014, there would
be automatic spending cuts (both in direct
spending and spending through the tax code)
as insurance against inaction.
The President’s fiscal framework set the
stage for the third significant development
that has occurred since the release of the 2012
Budget, negotiations this summer between

SUMMARY

the Administration and Congress on deficit
reduction and raising the statutory debt limit.
Considering that both parties had agreed on
the size of the deficit reduction necessary—$4
trillion over the next decade—there was hope
that a balanced package of that size, which included both spending cuts and revenue measures, could be agreed to. In pursuit of this
goal, the President called for an agreement on
a bold plan that would have included many
significant compromises for him and his party. Unfortunately, congressional Republicans
would not agree to a package that included
revenue increases. Agreement on a smaller
package limited to spending cuts was finally
reached over the last weekend in July, just before the Government exhausted its options for
continuing to finance obligations under the
existing debt limit.
The President signed the resulting agreement, the Budget Control Act of 2011, into law
on August 2. According to the Congressional
Budget Office, the provisions of the Act would
reduce the deficit by at least $2.1 trillion over
the next decade. The first step toward this
goal consists of approximately $900 billion
in deficit reduction achieved through tight
caps on discretionary spending. These caps
will bring discretionary spending to its lowest
level as a share of the economy since Dwight
D. Eisenhower was President. The caps were
designed to ensure that spending cuts were
balanced between security and non-security
programs by setting specific targets for each
category during the first two years. Assuming
that the reductions continue to be shared
across security and non-security programs
over the remainder of the 10-year period, the
caps would generate $420 billion savings on
security programs, an amount that includes a
projected $350 billion in defense savings.
The second step toward the $2.1 trillion in
deficit reduction is the establishment of the
bipartisan, bicameral Joint Select Committee
charged with finding $1.5 trillion in additional deficit reduction by the end of November
2011. Under the Act, if the Joint Committee
is unsuccessful or if Congress fails to pass
the Joint Committee’s plan, then a sequester
would be triggered that would cut $1.2 trillion in spending over 10 years, split evenly
between defense and non-defense programs.
This trigger is modeled on those devised for
the Gramm-Rudman-Hollings legislation in

3
the 1980s—legislation that created automatic
consequences based on congressional action
or inaction that led to a period of significant
deficit reduction. In addition to the deficit reduction included in the Budget Control Act,
further deficit reduction can be achieved if
the 2001 and 2003 tax cuts for the wealthiest
Americans are allowed to expire at the end of
calendar year 2012. The President has consistently said that he will refuse to let these
tax cuts be extended. Allowing these tax cuts
to expire as scheduled and returning the estate tax to its 2009 levels will increase revenue by $866 billion over the next 10 years.
Moreover, by reducing the amount that the
Government needs to borrow, this additional
revenue will lead to $160 billion in lower interest costs, bringing total deficit reduction
from this change in the tax code to more than
$1 trillion over the next 10 years.
Depending on whether the Joint Committee
succeeds or the fallback spending trigger is
activated, the Budget Control Act of 2011 will
reduce deficits by $2.1 to $2.4 trillion over
the coming 10 years. Allowing the 2001 and
2003 tax cuts for the wealthiest Americans to
expire further increases the total deficit reduction to $3.1 to $3.4 trillion, equivalent to
about 1.5 percent of 10-year GDP.
As shown in this Mid-Session Review, the
deficit reduction from the new discretionary
caps, the pending recommendations of the
Joint Committee, and the expiration of the
upper-income tax cuts, combined with winding down operations in Afghanistan and Iraq,
will bring deficits down to approximately 2.2
percent of GDP toward the end of the 10-year
budget window. These policy changes would
be sufficient to put the debt on a declining
path as a share of the economy and would
therefore place the budget in a fiscally sustainable position. The recommendations of
the Joint Committee are the key to achieving
this, which is why the President will recommend an ambitious, comprehensive, and balanced deficit reduction plan to Congress in
September that would place the country on
firm fiscal footing by the middle of this decade.
At the same time, Congress must appreciate
that the economy is still wrestling with the
after-effects of a very severe recession. Thus,
in addition to focusing on long-term deficit
reduction, the President will introduce after

4
Labor Day a package of meaningful, new initiatives to promote economic growth and create jobs. These will build on the actions the
President has been urging Congress to complete that will strengthen the economy and
create jobs, but also include new measures
that will accelerate job growth in the short
term. These could include a mix of tax cuts
to create jobs and provide economic security
to the middle class, innovative infrastructure
ideas to put people back to work, and some
measures specifically targeted at the longterm unemployed and other specific sectors of
the economy that are in particular need.
MID-SESSION UPDATE
The Mid-Session Review updates estimates
of Federal receipts, outlays, and the deficit for
legislation enacted through August 3, 2011—
principally the Budget Control Act of 2011—
and for a revised economic forecast, technical
re-estimates, and other policy changes that
have occurred since the February Budget was
released. The economic forecast, like the one
in the Congressional Budget Office’s August
update, is based on economic data available
through late June. In addition, reflecting the
substantial data revisions since that date, the
Mid-Session Review presents an alternative
economic forecast using the latest available
data along with estimates of the associated
budgetary consequences of this forecast revision. As shown in Table 4, the budgetary effects of the latest economic data are generally
similar to the forecast based on data from late
June.
Revised Deficit and Debt Outlook
The deficit for 2011 is now expected to be
$1.316 trillion, down $329 billion from the
deficit of $1.645 trillion deficit estimated in
February. As a percentage of GDP, the 2011
deficit is projected to be 8.8 percent of GDP,
as compared to 10.9 percent of GDP projected in February. This latest projection also
represents a slight decline in the deficit as
a percent of GDP from 9.0 percent in 2010.
A little less than half of the reduction in the
estimated 2011 deficit from February is due
to higher receipts. The remainder is due to a
combination of lower discretionary appropriations for 2011 than in the February Budget,
as provided in the full-year continuing appropriations enacted in April, and slower-than-

MID-SESSION REVIEW

expected spending across a range of Federal
programs, including defense discretionary
spending, purchases of GSE preferred stock,
and unemployment benefits. The lower projected deficit this year means that the Federal
Government’s borrowing needs should be lower as well.
Relative to the February estimate, deficits are also expected to be lower in 2012
and in each subsequent year of the 10-year
budget window, amounting to a total reduction of $1.450 trillion over 2012 through
2021. In 2012, deficits are expected to be
$145 billion lower as a result of a combination of enacted legislation and policy
changes ($91 billion) and economic and
technical re-estimates ($54 billion, chiefly
from higher receipts). Over the 10-year
horizon, the total of $1.450 trillion deficit
reduction from February is more than accounted for by the effect of enacted legislation and policy changes ($1.490 trillion).
The revised Mid-Session Review economic
forecast, discussed in detail in the next section, increases deficits by $696 billion over
the 10-year period while technical revisions
to revenue and spending estimates reduce
deficits by a nearly offsetting amount.
Taken together, the combined effect of the
revisions to the economic projections and
the technical re-estimation produces a deficit increase of $40 billion over the 10-year
horizon. Using the alternative economic
forecast that reflects data through late
August, the economic and technical re-estimate would produce a $220 billion increase
in the deficit over the next decade.
Federal Government debt held by the public can be viewed as the sum of all prior deficits less prior surpluses and is an important
indicator of the extent to which Government
activity affects the financial markets. Debt
held by the public is projected to be $10.264
trillion at the end of 2011, or 68.6 percent
of GDP, lower than the 72.0 percent of GDP
projected in February. Some debt held by
the public was used to issue direct loans or
to purchase financial assets as part of the
Troubled Asset Relief Program (TARP).
Debt held by the public excluding these
and other financial assets is projected to be
$9.194 trillion at the end of 2011, or 61.4
percent of GDP, down from February’s estimate of 63.0 percent of GDP.

5

SUMMARY

For 2012, debt held by the public is projected to increase to $11.307 trillion, or 72.1
percent of GDP, and to increase further to
73.5 percent of GDP in 2013. After 2013,
however, the deficit is projected to decline
to levels that result in a declining debt-toGDP ratio, with debt reaching 70.5 percent
of GDP by the end of the 10-year budget
window. Debt net of financial assets is also
projected to increase in 2012 and 2013, but
then to begin declining, reaching 61.3 percent of GDP in 2021.
Enacted Legislation
Full-year appropriations. The full-year
appropriations act, enacted on April 15, extended continuing appropriations at a level
that was roughly $80 billion below the level
proposed in the February Budget. The act
also made changes to the Pell Grant program
and repealed the Free Choice Voucher program originally enacted under the Affordable
Care Act. Relative to the February Budget,
the full-year appropriations act reduces the
deficit by $51 billion in 2011 and by $49
billion over the subsequent 10 years, 2012
through 2021.
Budget Control Act.
The Budget
Control Act of 2011, enacted on August 2,
authorized increases in the debt ceiling and
included a number of provisions that reduce budget deficits over the next 10 years.
Incorporating the caps on discretionary budget authority enacted in the Act in the MidSession Review reduces spending relative
to the February Budget by $740 billion over
the next 10 years. Additional provisions in
the Act that relate to program integrity initiatives and higher education financial assistance bring the reduction in spending to
a total of $753 billion. This total does not
include the effects of future deficit reduction recommended by the Joint Committee,
as discussed below.
Other enacted legislation and debt service. Other enacted legislation, including
the Comprehensive 1099 Taxpayer Protection
and Repayment of Exchange Subsidy
Overpayments Act of 2011, has a minimal effect on the deficit. Debt service on the effects
of enacted legislation brings the total deficit
reduction due to enacted legislation to $989
billion over 10 years.

Estimating Changes
New estimates of receipts and outlays due
to revisions to the economic forecast and technical revisions reduce the deficit significantly
in 2011. These changes reduce the deficit by
a smaller amount in 2012 and raise the deficit
slightly over the 10-year period as a whole.
In 2011, revisions to the economic projection and technical changes reduce the deficit
by $261 billion, largely because of updated
information about actual tax collections since
February and actual spending trends. Higher
receipts account for $141 billion of this improvement, with lower current-year spending
accounting for the remainder. The reduction
in spending is split roughly evenly between
discretionary programs (largely slower-thananticipated spending for defense programs)
and mandatory programs (including lower
payments for GSE preferred stock purchases
and lower spending for unemployment and
veterans benefits).
Over the 10-year period, revisions to the economic projection and technical re-estimates
increase the deficit by $40 billion. Receipts
are reduced by $46 billion, as lower tax collections due to revisions in the economic forecast,
chiefly lower near-term GDP growth and lower
projected wage and salary income, are partially offset by increases due to technical factors, such as new data available from 2010 tax
returns. Increases in outlays due to the new
economic forecast, mostly the result of higher
cost-of-living adjustments and debt service on
all economic changes, are very nearly offset by
reductions in outlays due to technical changes.
More detail about changes in receipt and outlay projections can be found in the receipt and
spending sections of the Mid-Session Review.
Deficit Reduction Allowance
The Joint Select Committee on Deficit
Reduction established by the Budget Control
Act is tasked with developing legislative proposals for reducing the deficit, with a target of $1.5 trillion in deficit reduction. The
Administration will be recommending a balanced array of options for reducing the deficit
that encompasses the entire budget including spending and revenue measures. In light
of the ongoing Joint Committee process, the
Mid-Session Review includes a deficit reduc-

6

MID-SESSION REVIEW

tion allowance of $1.5 trillion over 10 years.
The February Budget included specific mandatory and receipt proposals that reduce the
deficit by $1.0 trillion. The deficit allowance
in the Mid-Session Review substitutes for
the specific mandatory and receipt proposals detailed in the February Budget, and is
not meant to prejudge any specific spending or receipt proposals to be recommended

by the Administration and considered by the
Committee. The Administration will release
its recommendations for proposals to be considered by the Joint Committee in September.
Relative to the policies already proposed in
February, the Mid-Session Review’s allowance
for Joint Committee deficit reduction reduces
the deficit by $501 billion over 10 years, including debt service.

Table 1. CHANGES IN DEFICITS FROM THE FEBRUARY BUDGET
(In billions of dollars)
20122011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 20122016 2021
February Budget deficit ������������������������������������������ 1,645 1,101 768 645 607 649 627 619 681 735 774
Percent of GDP ���������������������������������������������������� 10.9% 7.0% 4.6% 3.6% 3.2% 3.3% 3.0% 2.9% 3.0% 3.1% 3.1%
Enacted legislation:
Budget Control Act of 2011 ���������������������������
2011 full-year appropriations ������������������������
Other legislation ��������������������������������������������
Debt service ����������������������������������������������������
Subtotal, enacted legislation ������������������������������

–*
–51
1
–*
–50

–32
–21
–1
–*
–54

–51
–6
1
–2
–58

–72
–3
1
–6
–80

–75
–2
1
–11
–88

Economic and technical re-estimates:
Receipts ����������������������������������������������������������
Discretionary programs ���������������������������������

–141
–58

–65
13

–7
22

11
9

22
–1

20
–5

17
–6

17
–8

14
–6

10
–6

7
–6

8
–11
–1
–3

6
–17
9
–3

7
–14
11
–3

10
–11
12
–6

14
–10
13
–8

16
–10
13
–10

16
–10
13
–10

15
–11
12
–12

16
–11
11
–13

16
–11
10
–14

17
–12
8
–19

Mandatory:
Refundable tax credits �������������������������������
Unemployment compensation �������������������
Social Security ���������������������������������������������
Medicaid �����������������������������������������������������
Supplemental Nutrition Assistance
Program ��������������������������������������������������
Foreign Military Sales Trust Fund ������������
Purchases of GSE preferred stock ��������������
Veterans benefits �����������������������������������������
Civilian and military retirement ���������������
Medicare ������������������������������������������������������
Other ������������������������������������������������������������
Total mandatory ��������������������������������������
Net interest1 ��������������������������������������������������
Allowances for costs of future emergencies ������
Subtotal, economic and technical re-estimates �
Change due to moving the February Budget
proposals to the deficit reduction allowance2 �����
Total, changes ����������������������������������������������������������
Mid-Session Review deficit �������������������������������������
Percent of GDP ����������������������������������������������������

–79 –82 –87 –89 –95 –90 –309 –753
–2
–2
–2
–3
–4
–4 –35 –49
*
*
*
*
*
*
2
3
–16 –21 –26 –31 –36 –42 –35 –190
–97 –105 –115 –123 –135 –135 –376 –989
–19
37

46
6

53 133
–62 –117
59 112
–29 –98

*
5
3
4
7
8
8
8
7
5
7
28
62
–*
–1
1
1
*
–1
–4
–4
–4
–4
–5
* –20
–25 ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........
–10
3
2
2
2
2
2
2
3
3
2
11
24
–*
2
2
2
2
2
2
2
2
2
2
10
21
–4
–8
–6
–5
–4
–3
2
3
4
4
8 –25
–4
–24
10
7
2
3
1
*
–*
–*
–2
*
23
21
–70
10
–2
–261

6
–5
–3
–54

11
–23
–1
2

12
–29
–*
3

18
–13
–*
25

19
–11
–*
22

19
17
14
8
9
–8
–9 –12 –13 –16
–* ......... ......... ......... .........
21
16
11
–1
–6

67 134
–81 –140
–6
–6
–1
40

–19 –37 –63 –95 –23
8 –43 –53 –71 –60 –64 –211 –501
–329 –145 –120 –171 –86 –66 –126 –152 –183 –195 –205 –588 –1,450
1,316 956 648 473 521 583 501 467 498 540 568
8.8% 6.1% 3.9% 2.7% 2.8% 3.0% 2.4% 2.2% 2.2% 2.3% 2.3%

Note: positive figures represent higher outlays or lower receipts.
*$500 million or less.
1
Includes debt service on all re-estimates.
2
Includes debt service.

ECONOMIC ASSUMPTIONS
This Mid-Session Review (MSR) updates
the economic forecast that was completed last
November and released with the 2012 Budget
in early February. The 2012 Budget forecast
projected that the economic recovery which began in 2009 would continue and that unemployment would fall gradually from its elevated levels. As the economy recovered, the 2012 Budget
forecast inflation to remain moderate, and interest rates to rise gradually. In general terms, the
forecast for the MSR maintains these assumptions but with modifications to take account of
information on changing conditions available at
the time of the completion of the MSR forecast,
in late June. In addition, to reflect the substantial amount of economic turbulence over the
past two months, the MSR includes an alternative economic forecast that incorporates the latest data through the end of August along with a
presentation of its associated budgetary effects.
Real GDP has risen for eight straight quarters since economic growth resumed in mid2009. Revisions to GDP growth published in
late July, after the MSR forecast was completed, showed growth slowing sharply in
the first half of 2011. The unemployment
rate has declined from its peak above 10 percent in October 2009 to 9.1 percent in July
2011. Following the resumption of real GDP
growth, the economy began adding jobs, and
private sector employment has increased in
each of the past 17 months. The labor market
recovery, however, is occurring only gradually. It will take several years of healthy job
growth to offset the nearly 9 million jobs
that were lost between January 2008 and
February 2010.
Administration policies, as well as the automatic fiscal stabilizers such as the unemployment insurance system, contributed to the
turnaround in 2009. The American Recovery
and Reinvestment Act (Recovery Act) was
passed soon after the President took office at
a time when jobs were declining by 700,000
per month. Recent revisions showed GDP falling at that time at a rate even faster than
previously estimated when the President took
office, declining at an average annualized rate
of 7.8 percent in the fourth quarter of 2008
and the first quarter of 2009, the worst six-

month period since quarterly data has been
collected. The Administration’s prompt action
helped to reverse this precipitous decline, and
the turnaround in real GDP growth, and later
in jobs, opened the way to an economic recovery. Further actions by the Administration
and Congress, culminating in the passage
of the Tax Relief, Unemployment Insurance
Reauthorization, and Job Creation Act in
December 2010, have helped sustain demand
and foster growth as the Recovery Act has
phased out and as the economy has faced further, unanticipated challenges.
For example, the steep decline in the housing market ended in 2009, but the housing
sector has struggled to recover from the recession. Almost 3 million homes have been
repossessed since 2006, but even so, at the
beginning of 2011, there were estimated to
be 5 million seriously delinquent mortgage
loans, many of which will eventually result
in foreclosure. Government programs and
the private sector HOPE Now alliance have
helped nearly 5 million affected homeowners with their mortgages, either by helping
negotiate new terms for their loans or by
reducing outstanding balances, but the remaining problems are still significant. Until
more loans are resolved, house prices are not
likely to recover, and housing investment will
probably remain sluggish. Likewise, spreads
between private debt, such as commercial paper, and Treasury securities have returned to
pre-crisis levels, but commercial banks and
other private lenders have tightened credit
standards and many credit-worthy borrowers
continue to have difficulty accessing credit,
making it difficult for businesses to expand,
entrepreneurs to launch ventures, and families to borrow to buy a new home or send a
child to college. This is a common experience
following a financial crisis in which banks and
other credit market institutions have suffered
severe losses. If past experience is a guide,
credit will eventually become more available,
but that will take more time.
A second drag on the recovery has been fiscal consolidation at the State and local government level. Driven by balanced budget requirements and decreased tax revenue, this fiscal
7

8
tightening has reduced aggregate demand
and slowed growth nationally. Over the last 12
months, employment in State and local government has declined by 340,000 jobs.
Third, globally, a combination of events has
weighed on economic growth. Political uncertainty in the Middle East caused world oil
markets to tighten, especially for the highquality crude oil that is most useful in refining gasoline. The price of oil rose by 16 percent between September and December 2010
and then rose another 20 percent in March
and April of this year, placing a burden on
American consumers. Although the U.S. economy is less sensitive to oil price shocks than it
was in the 1970s, higher fuel prices still exact
a toll, and this was one of the main factors
in holding growth below expectations in the
first half of 2011. Also, on March 11, a severe
earthquake followed by a tsunami seriously
damaged the coastal regions of northeastern
Japan. These natural disasters have had a
worldwide impact because they curtailed production of parts needed for Japanese automobiles manufactured both in Japan and abroad.
In the United States, for example, production
of motor vehicles fell 6.3 percent (0.53 million
units at an annual rate) in the second quarter, with most of the decline occurring at the
American facilities of Japanese automakers.
Moreover, the sovereign debt crisis that began in 2010 in Europe has intensified in recent weeks, causing a selloff in global equity
markets that threatens to place a new drag
on consumer confidence and the global recovery. Last year, several European countries encountered difficulty in obtaining credit, and financial markets around the world responded
negatively to these developments spreading
the effects of the crisis to the United States
and elsewhere. The European Union acted
forcefully to confront these issues when they
first emerged, and the affected governments
have attempted to restrain their budget deficits. Even with these actions, however, the
European recovery remains at risk because of
increased uncertainty and because the measures taken to address the fiscal crisis have
had the effect in some cases of limiting demand and hampering recovery. Concerns over
sovereign debt returned in recent weeks and
spread to larger countries in the European
Union, creating volatility in global financial
markets.

MID-SESSION REVIEW

Although the effects of these events are expected to be temporary in most cases and the
Administration remains confident about medium-term prospects for growth in the United
States, the unexpected slowdown in 2011
led the Administration to reduce projections
in its MSR forecast for near-term growth in
2011 and 2012. Meanwhile, new data released since those projections were locked in
late June, including significant revisions to
previously released GDP data, together with
other analysis have led both private and public forecasters to reduce their projections for
growth and employment even further over the
past two months. To present a fuller picture,
this section also includes an alternative forecast in Table 4 below that reflects the latest
economic data and outlook. While the effects
of the economic turbulence are great on individuals, the cumulative impact on the fiscal
condition of the country is relatively minor
over the course of the budget window.
Despite recent setbacks, the Administration
expects the economy to grow at increasing
rates in the months and years to come. One
reason for this is that the U.S. economy is
operating well below its capacity, with higher levels of unemployment and more unused
resources than at any time in over a quarter
century. The potential for a sharp recovery
is present in this low level of resource utilization. The normal limits to growth are
not binding when there is so much unused
capacity available. With rapid growth projected in 2013-2017, the unemployment rate
is projected to decline and real GDP is projected to return to its potential level. Beyond
2017, the Administration’s forecast is based
on the long-run trends expected for real GDP
growth, price inflation, and interest rates.
Projected real GDP growth in the long run is
somewhat below the historical average for the
United States because of an expected slowdown in the growth of the labor force as the
population ages. Economic growth is expected
to average 2.5 percent in the long run, which
is unchanged from previous forecasts.
ECONOMIC PROJECTIONS
Given the substantial amount of economic turbulence that the country experienced
since the MSR economic projections were
finalized in June, this section also includes
an alternative projection that takes into ac-

9

ECONOMIC ASSUMPTIONS

count more recent data. These more recent
data include both revised historical data for
the National Income and Product Accounts
(NIPA) released in July, and updated data on
current economic conditions and the outlook
that were not available in June. Table 2 presents a summary of the original projection in
June and, in the Addendum, the adjustments
to that original projection related to the
NIPA revision. These adjustments generally
maintain the same quarterly growth rates
for GDP and incomes as the original forecast
but start from the revised historical levels
in 2011 Q1. In other words, they adjust the
MSR forecast for the revisions to historical data, but do not reflect how the outlook
might have changed as a result of the revisions or other more recent data.
The alternative forecast, shown in Table 4,
is an update of the projection based on information available through late August. Since
June, there have been significant changes to
the economic outlook, including the annual
revision of the NIPA which showed a large
downward adjustment in growth in the first
quarter, a subsequent downward revision of
growth in the second quarter, and other economic indicators suggesting slower growth
than originally projected in the second
half. In addition, the Federal Open Market

Committee (FOMC) statement in August
suggested that interest rates will remain at
their current low level for longer than had
previously been anticipated.
Real Gross Domestic Product (GDP) and the
Unemployment Rate: Real GDP is expected to
rise by 2.8 percent during the four quarters of
2011 (2.4 percent in the adjusted forecast) and
to increase 3.2 percent in the four quarters of
2012. The growth rate is projected to rise to
4.0 percent in 2013 and 2014. Beyond 2014,
real GDP growth is projected to moderate as
the level of real GDP approaches its potential.
The growth rate is steady at 2.5 percent per
year in 2018-2021.
The unemployment rate is projected to average 8.8 percent in 2011, slightly below its
level in July. Unemployment is projected to
decline slowly because of the moderate pace
of expected real GDP growth and because, as
labor market conditions improve, discouraged
workers rejoin the labor force, adding temporarily to unemployment. With continued
growth, the unemployment rate is projected
to fall, but it is not projected to fall below 6.0
percent until 2016. These projections reflect
the close relationship that has prevailed historically between changes in real GDP and
unemployment.

Table 2. ECONOMIC ASSUMPTIONS 1
(Calendar years; dollar amounts in billions)
Actual
2009

Projections

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Gross Domestic Product
(GDP):
Levels, dollar amounts in
billions:
Current dollars ��������������������� 14,119 14,660 15,281 16,019 16,889 17,851 18,863 19,893 20,906 21,852 22,807 23,798 24,830
Constant (2005) dollars ������� 12,881 13,248 13,586 14,030 14,549 15,131 15,717 16,294 16,820 17,272 17,703 18,146 18,600
Price index (2005 = 100) ������ 109.6 110.7 112.5 114.2 116.1 118.0 120.0 122.1 124.3 126.5 128.8 131.1 133.5
Percent change, Q4/Q4:
Current dollars ���������������������
Constant (2005) dollars �������
Price index (2005 = 100) ������

0.6
0.2
0.5

4.2
2.8
1.3

4.6
2.8
1.8

4.8
3.2
1.6

5.7
4.0
1.6

5.8
4.0
1.7

5.6
3.8
1.7

5.4
3.6
1.8

4.8
3.0
1.8

4.4
2.5
1.8

4.4
2.5
1.8

4.3
2.5
1.8

4.3
2.5
1.8

Percent change, year over year:
Current dollars ���������������������
Constant (2005) dollars �������
Price index (2005 = 100) ������

–1.7
–2.6
0.9

3.8
2.9
1.0

4.2
2.6
1.6

4.8
3.3
1.5

5.4
3.7
1.7

5.7
4.0
1.6

5.7
3.9
1.7

5.5
3.7
1.7

5.1
3.2
1.8

4.5
2.7
1.8

4.4
2.5
1.8

4.3
2.5
1.8

4.3
2.5
1.8

Incomes, billions of current
dollars:

10

MID-SESSION REVIEW

Table 2. ECONOMIC ASSUMPTIONS 1—Continued
(Calendar years; dollar amounts in billions)
Actual
2009

Projections

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

Domestic corporate profits ���
Employee compensation ������
Wages and salaries ��������������
Other taxable income2 ����������

906
7,812
6,274
3,206

1,241
7,985
6,399
3,264

1,322
8,264
6,624
3,427

1,505
8,625
6,931
3,563

1,575
9,112
7,352
3,753

1,622 1,681 1,723 1,759 1,700 1,647 1,627 1,632
9,669 10,270 10,902 11,528 12,127 12,731 13,338 13,935
7,804 8,296 8,817 9,348 9,847 10,353 10,848 11,327
3,973 4,187 4,423 4,673 4,898 5,108 5,305 5,496

Consumer Price Index (all
urban):3
Level (1982–84 = 100) ����������
Percent change, Q4/Q4 ���������
Percent change, year/year ����

214.5
1.4
–0.3

218.1
1.2
1.6

224.3
2.8
2.8

228.4
1.9
1.8

232.8
1.9
1.9

237.4
2.0
2.0

242.2
2.0
2.0

247.2
2.1
2.1

252.5
2.1
2.1

257.7
2.1
2.1

263.2
2.1
2.1

268.7
2.1
2.1

274.4
2.1
2.1

Unemployment rate, civilian,
percent:
Fourth quarter level �������������
Annual average ��������������������

10.0
9.3

9.6
9.6

8.6
8.8

8.2
8.3

7.4
7.7

6.7
6.9

6.0
6.3

5.5
5.7

5.2
5.3

5.2
5.2

5.2
5.2

5.2
5.2

5.2
5.2

Federal pay raises, January,
percent:
Military4 ��������������������������������
Civilian5 ��������������������������������

3.9
3.9

3.4
2.0

1.4
0.0

1.6
0.0

NA
NA

NA
NA

NA
NA

NA
NA

NA
NA

NA
NA

NA
NA

NA
NA

NA
NA

Interest rates, percent:
91-day Treasury bills6 ����������
10-year Treasury notes ��������

0.2
3.3

0.1
3.2

0.1
3.4

0.5
3.8

1.8
4.3

3.2
4.7

3.8
5.0

4.0
5.2

4.1
5.3

4.1
5.3

4.1
5.3

4.1
5.3

4.1
5.3

ADDENDUM:7
Gross Domestic Product
(GDP), revised:
Levels, dollar amounts in
billions:
Current dollars ��������������������� 13,939 14,527 15,128 15,859 16,720 17,672 18,674 19,694 20,697 21,633 22,578 23,559 24,582
Constant (2005) dollars ������� 12,703 13,088 13,368 13,804 14,314 14,887 15,464 16,032 16,549 16,993 17,418 17,854 18,300
Price index (2005 = 100) ������ 109.7 111.0 113.2 114.9 116.8 118.7 120.7 122.8 125.0 127.3 129.6 131.9 134.3
Percent change, Q4/Q4:
Current dollars ���������������������
Constant (2005) dollars �������
Price index (2005 = 100) ������

0.0
–0.5
0.7

4.7
3.1
1.6

4.4
2.4
1.9

4.8
3.2
1.6

5.7
4.0
1.6

5.8
4.0
1.7

5.6
3.8
1.7

5.4
3.6
1.8

4.8
3.0
1.8

4.4
2.5
1.8

4.4
2.5
1.8

4.3
2.5
1.8

4.3
2.5
1.8

Percent change, year over year:
Current dollars ���������������������
Constant (2005) dollars �������
Price index (2005 = 100) ������

–2.5
–3.5
1.1

4.2
3.0
1.2

4.1
2.1
1.9

4.8
3.3
1.5

5.4
3.7
1.7

5.7
4.0
1.6

5.7
3.9
1.7

5.5
3.7
1.7

5.1
3.2
1.8

4.5
2.7
1.8

4.4
2.5
1.8

4.3
2.5
1.8

4.3
2.5
1.8

Incomes, billions of current
dollars, revised:
Domestic corporate profits ���
Employee compensation ������
Wages and salaries ��������������
Other taxable income2 ����������

1,002
7,806
6,270
2,955

1,418
7,971
6,408
3,108

1,511
8,251
6,634
3,266

1,719
8,611
6,940
3,396

1,800
9,097
7,362
3,573

1,853 1,921 1,969 2,010 1,942 1,882 1,859 1,865
9,653 10,253 10,884 11,509 12,107 12,710 13,316 13,913
7,815 8,308 8,830 9,361 9,862 10,368 10,863 11,343
3,777 3,980 4,201 4,432 4,638 4,828 5,008 5,182

NA = Not Available; Q4/Q4 = fourth quarter over fourth quarter
Based on information available as of June 2011.
2
Rent, interest, dividend, and proprietors' income components of personal income.
3
Seasonally adjusted CPI for all urban consumers.
4
Percentages apply to basic pay only; percentages to be proposed for years after 2012 have not yet been determined.
5
Overall average increase, including locality pay adjustments. Percentages to be proposed for years after 2012 have not yet been determined.
6
Average rate, secondary market (bank discount basis).
7
June assumptions adjusted for July 29, 2011 revisions to the National Income and Product Accounts.
1

11

ECONOMIC ASSUMPTIONS

Inflation: Consumer price inflation rose in
late 2010 and in the earlier part of this year
mainly because of a sharp rise in world oil
prices. Rising food prices also contributed to
the increase. Inflation has moderated since
then as oil prices have declined. Core inflation, which excludes food and energy prices,
also rose, but much less dramatically than
the top-line measure. As measured by the
CPI, core inflation was 1.8 percent between
July 2010 and July 2011; it had been only
0.9 percent over the preceding 12 months.
Looking ahead, core inflation is expected to
edge up somewhat as the economy recovers and unemployment declines. In the long
run, the CPI inflation rate is projected to be
2.1 percent per year. The other main measure of inflation is the chained price index
for Gross Domestic Product. Year-over-year
inflation by this measure is projected at 1.6
percent in 2011 (1.9 percent adjusted), 1.5
percent in 2012, and ultimately 1.8 percent
in 2017-2021.
Interest Rates: The projections for interest
rates are based on financial market data as of
June, including market expectations at that
time. Consequently, the forecast does not incorporate the latest market data, the Federal
Reserve’s statement in August that short-term
rates would remain at their current low levels
through mid-2013, or the dramatic reduction
in long-term Treasury rates that occurred in
early August as a result of the “flight to quality” caused by the crisis in Europe. The MSR
forecast projects the three-month Treasury
bill rate to average 0.1 percent in 2011, which
is still likely to be true, but to begin rising
in 2012 and to reach 4.1 percent by 2017.
In light of the Federal Reserve’s statement,
the rise in rates in 2012 now seems unlikely. Similar caveats hold for the projection of
long-term interest rates. The yield on the 10year Treasury note is projected to average 3.4
percent in 2011 and to rise to 5.3 percent by
2017. Now that long-term yields have fallen
well below their June values, the forecast for
2011 appears to be too high. In the later years
of the forecast, however, when interest rates
are expected to be close to their historical averages in real terms given the projected rate
of inflation there is no reason to believe the
forecast would change based on recent data.
Incomes and Income Shares: Corporate
profits have rebounded more quickly than

labor compensation (which consists of wages
and salaries and employee fringe benefits).
As a result, corporate profits have risen as a
share of the economy over the past 12 quarters, while labor compensation as a share of
the economy has fallen below its long-run average. As the economy recovers, this situation
is expected to reverse. Labor compensation is
projected to rise somewhat relative to the size
of the economy, while the share of corporate
profits is projected to fall. The wage share,
excluding fringe benefits, is also expected to
recover from its recent low level in step with
the increase in compensation.
FORECAST COMPARISONS
A comparison with the most recent
Congressional Budget Office (CBO), Blue
Chip, and FOMC forecasts is shown below in
Table 3. For 2011, the projected rate of real
GDP growth is above that of the Blue Chip
Consensus (an average of about 50 privatesector forecasts) although when the MSR
forecast was determined in June, the difference was smaller. The CBO forecast, which
was completed around the same time as the
Administration’s projections, is similar for
real GDP in 2011. The FOMC forecast, which
also dates from June, is slightly higher, mainly
because the Administration updated its 2011
forecast for the revisions to the historical data
for GDP released in late July by the Bureau
of Economic Analysis. Neither the FOMC nor
the CBO forecasts were adjusted for these
new data, which showed lower growth in the
first half of 2011. The consensus forecast has
shifted down in the last two months.
In 2012, real GDP growth (fourth quarter
over fourth quarter) is expected to be 3.2
percent, which is just below the June FOMC
central tendency of 3.3 to 3.7 percent, but it
is well above the latest Blue Chip consensus
of 2.7 percent, which is the same growth rate
that CBO projects for 2012. In 2013, CBO
expects a relatively sharp slowdown in the
growth rate, because its current-law policy
assumptions imply that all of the 2001-2003
tax cuts will expire at the end of 2012. In turn,
CBO expects a relatively rapid growth rate in
2014-2015.
Looking further into the future, the
Administration expects the economy eventually to recover much of the ground lost to

12

MID-SESSION REVIEW

the 2008-2009 recession. This will require
a phase of relatively rapid growth, which in
the current forecast is projected to occur in
2013-2016. The FOMC anticipates a similar
catch-up. While CBO also expects a catch-up
during this time frame, it is not as much as
the Administration or the FOMC is project-

ing. Meanwhile, the Blue Chip consensus expects to make up relatively little of this lost
output. This is a major difference in the forecasts for real GDP. All the forecasters have
a similar expectation for the long-run growth
rate, which is expected to be around 2-1/2 percent per year.

Table 3. COMPARISON OF ECONOMIC ASSUMPTIONS
(Calendar years; dollar amounts in billions)

Nominal GDP:
MSR ��������������������������������������������������
Budget ����������������������������������������������
CBO ��������������������������������������������������
Blue Chip ������������������������������������������

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

14,527
14,651
14,660
14,527

15,128
15,240
15,238
15,079

15,859
16,032
15,817
15,727

16,720
17,006
16,301
16,560

17,672
18,043
17,261
17,438

18,674
19,052
18,406
18,327

19,694
20,037
19,333
19,225

20,697
20,986
20,260
20,148

21,633
21,910
21,183
21,095

22,578
22,866
22,140
22,087

23,559
23,860
23,096
23,125

24,582
24,896
24,082
24,212

3.1
2.4
3.2
4.0
4.0
3.8
3.6
3.0
2.5
2.5
2.5
2.5
3.1
4.0
4.5
4.2
3.6
3.2
2.7
2.5
2.5
2.5
2.8
2.3
2.7
2013-2016 Average: 3.6
2017-2021 Average: 2.4
3.1
1.6
2.7
2.8 2.7–2.9 3.3–3.7 3.5–4.2
Longer Run Average: 2.5–2.8

2.5
2.5

Percent change, fourth quarter over fourth quarter
Real GDP:
MSR ��������������������������������������������������
Budget ����������������������������������������������
CBO ��������������������������������������������������
Blue Chip ������������������������������������������
FOMC Central Tendency �����������������

Percent change, year over year
Real GDP:
MSR ��������������������������������������������������
Budget ����������������������������������������������
CBO ��������������������������������������������������
Blue Chip ������������������������������������������

3.0
2.7
2.9
3.0

2.1
2.7
2.4
1.8

3.3
3.6
2.6
2.5

3.7
4.4
1.7
3.2

4.0
4.3
4.4
3.1

3.9
3.8
5.0
2.9

3.7
3.3
3.2
2.8

3.2
2.9
2.8
2.7

2.7
2.6
2.5
2.6

2.5
2.5
2.5
2.6

2.5
2.5
2.3
2.6

2.5
2.5
2.3
2.6

GDP price index:
MSR ��������������������������������������������������
Budget ����������������������������������������������
CBO ��������������������������������������������������
Blue Chip ������������������������������������������

1.2
1.0
1.0
1.2

1.9
1.3
1.5
2.1

1.5
1.5
1.2
1.9

1.7
1.6
1.4
2.0

1.6
1.7
1.4
2.1

1.7
1.7
1.6
2.1

1.7
1.8
1.8
2.1

1.8
1.8
1.9
2.1

1.8
1.8
2.0
2.1

1.8
1.8
2.0
2.1

1.8
1.8
2.0
2.1

1.8
1.8
2.0
2.1

Consumer Price Index (CPI-U):
MSR ��������������������������������������������������
Budget ����������������������������������������������
CBO ��������������������������������������������������
Blue Chip ������������������������������������������

1.6
1.6
1.6
1.6

2.8
1.3
2.9
3.0

1.8
1.8
1.5
2.2

1.9
1.9
1.3
2.3

2.0
2.0
1.3
2.4

2.0
2.0
1.8
2.4

2.1
2.1
2.1
2.4

2.1
2.1
2.3
2.4

2.1
2.1
2.3
2.4

2.1
2.1
2.3
2.4

2.1
2.1
2.3
2.4

2.1
2.1
2.3
2.4

5.7
5.3
5.2
5.2
5.5
5.3
5.3
5.3
5.3
5.3
5.2
5.2
6.0
5.8
5.6
5.6
Longer Run Average:5.2–5.6

5.2
5.3
5.2
5.6

5.2
5.3
5.2
5.6

Annual average in percent
Unemployment rate:
MSR ��������������������������������������������������
Budget ����������������������������������������������
CBO ��������������������������������������������������
Blue Chip ������������������������������������������
FOMC Central Tendency 1 ����������������

9.6
8.8
8.3
7.7
9.6
9.3
8.6
7.5
9.6
9.4
8.4
7.6
9.6
9.0
8.7
7.5
9.6 8.6–8.9 7.8–8.2 7.0–7.5

6.9
6.6
6.8
6.8

6.3
5.9
5.9
6.3

91-day Treasury bills:
MSR ��������������������������������������������������
Budget ����������������������������������������������
CBO ��������������������������������������������������
Blue Chip ������������������������������������������

0.1
0.1
0.1
0.1

0.1
0.2
0.1
0.1

0.5
0.9
0.1
0.5

1.8
2.6
0.2
2.9

3.2
3.7
0.8
3.6

3.8
4.0
1.9
3.8

4.0
4.1
3.2
3.9

4.1
4.1
4.0
4.0

4.1
4.1
4.0
3.9

4.1
4.1
4.0
3.9

4.1
4.1
4.0
3.9

4.1
4.1
4.0
3.9

10-year Treasury notes:
MSR ��������������������������������������������������

3.2

3.4

3.8

4.3

4.7

5.0

5.2

5.3

5.3

5.3

5.3

5.3

13

ECONOMIC ASSUMPTIONS

Table 3. COMPARISON OF ECONOMIC ASSUMPTIONS—Continued
(Calendar years; dollar amounts in billions)
2010
Budget ����������������������������������������������
CBO ��������������������������������������������������
Blue Chip ������������������������������������������

3.2
3.2
3.2

2011
3.0
3.3
3.2

2012

2013

3.6
3.2
3.6

2014

4.2
3.3
4.9

2015

4.6
3.8
5.2

4.9
4.3
5.4

2016
5.2
4.9
5.4

2017
5.3
5.3
5.4

2018

2019

5.3
5.3
5.4

2020

5.3
5.3
5.4

2021

5.3
5.3
5.4

5.3
5.3
5.4

MSR = Mid-Session Review (forecast date June 2011 adjusted for July 2011 National Income and Product Account revisions)
Budget = 2012 Budget (forecast date November 2010)
CBO = Congressional Budget Office (forecast date July 2011)
FOMC = Federal Reserve Open Market Committee (forecast central tendency, date June 2011)
Blue Chip = August 2011 Blue Chip Consensus Forecast extended with March 2011 Blue Chip long-run survey
Sources: Administration; CBO, The Budget and Economic Outlook: an Update, August 2011
FOMC, Minutes of the Federal Open Market Committee, June 21–22, 2011; Blue Chip Economic Indicators, March and August 2011,
Aspen Publishers.
1
Fourth quarter levels of unemployment rate.

The Administration projects that unemployment will average 8.8 percent in 2011, 8.3
percent in 2012, and 7.7 percent in 2013. CBO
expects unemployment to remain high for a
longer period. It projects an unemployment
rate of 8.9 percent in 2011 and 8.7 percent
in 2012-2013. The latest Blue Chip consensus is: 9.0 percent in 2011 and 8.7 percent in
2012. The semiannual long-run extension of
the Blue Chip forecast was released in March
2011, and the next extension will not be available until October. In March, the Blue Chip
had expected a larger decline in the unemployment rate, which can be seen in Table 3 in
the values shown for 2013 through 2021. The
June FOMC projections also show unemployment falling by more than the latest consen-

sus projections. In the long run, all of the forecasts expect the unemployment rate to reach
a level of between 5 and 6 percent.
The forecasts are similar for inflation and
interest rates. All of the forecasters shown in
Table 3 expect inflation to rise to around 2
percent per year, which is close to the average
inflation rate of the past several years. The
unusually low level of Federal interest rates
that has prevailed since the financial crisis is
also expected to end as real interest rates return to near their historical averages but only
gradually over the next few years. The recent
consensus expects a slower rise in interest
rates than was assumed a few months ago.

Table 4. ALTERNATIVE ECONOMIC FORECAST
Economic Assumptions
(Calendar years)
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Nominal GDP:
% Change, 4th/4th:
MSR ���������������������������������������������������������
Alternative ����������������������������������������������

4.7
4.7

4.4
3.6

4.8
4.5

5.7
5.5

5.8
5.8

5.6
6.0

5.4
5.8

4.8
5.4

4.4
4.3

4.4
4.3

4.3
4.3

4.3
4.3

% Change, Year/Year:
MSR ���������������������������������������������������������
Alternative ����������������������������������������������

4.2
4.2

4.1
3.7

4.8
4.1

5.4
5.3

5.7
5.6

5.7
5.9

5.5
5.9

5.1
5.6

4.5
4.7

4.4
4.3

4.3
4.3

4.3
4.3

% Change, 4th/4th:
MSR ���������������������������������������������������������
Alternative ����������������������������������������������

3.1
3.1

2.4
1.6

3.2
2.9

4.0
3.8

4.0
4.0

3.8
4.2

3.6
4.0

3.0
3.6

2.5
2.5

2.5
2.5

2.5
2.5

2.5
2.5

% Change, Year/Year:
MSR ���������������������������������������������������������
Alternative ����������������������������������������������

3.0
3.0

2.1
1.7

3.3
2.6

3.7
3.5

4.0
3.9

3.9
4.1

3.7
4.1

3.2
3.7

2.7
2.9

2.5
2.5

2.5
2.5

2.5
2.5

Real GDP:

14

MID-SESSION REVIEW

Table 4. ALTERNATIVE ECONOMIC FORECAST—Continued
Economic Assumptions
(Calendar years)
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Unemployment Rate:
MSR ���������������������������������������������������������
Alternative ����������������������������������������������

9.6
9.6

8.8
9.1

8.3
9.0

7.7
8.5

6.9
7.8

6.3
7.0

5.7
6.1

5.3
5.5

5.2
5.2

5.2
5.2

5.2
5.2

5.2
5.2

91-Day Treasury Bills:
MSR ���������������������������������������������������������
Alternative ����������������������������������������������

0.1
0.1

0.1
0.1

0.5
0.1

1.8
0.4

3.2
2.3

3.9
3.8

4.0
4.0

4.1
4.1

4.1
4.1

4.1
4.1

4.1
4.1

4.1
4.1

10-Year Treasury Notes:
MSR ���������������������������������������������������������
Alternative ����������������������������������������������

3.2
3.2

3.4
3.0

3.8
3.3

4.3
3.9

4.7
4.6

5.0
5.0

5.2
5.2

5.3
5.3

5.3
5.3

5.3
5.3

5.3
5.3

5.3
5.3

Interest Rates:

Budget Effects of Alternative Forecast Relative to MSR
(Fiscal years; in billions of dollars)
20122011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 20122016 2021
Receipt changes ������������������������������������������������
Outlay changes:
Unemployment �������������������������������������������
Net interest (rates) ������������������������������������
All other, including debt service ����������������
Total outlay changes �����������������������������
Deficit increase (–) ��������������������������������������������
* $500 million or less.

–9

–30

–55

–60

–50

–34

–14

–2

–2

–2

–2 –229 –250

2
2
*
4

12
–14
–1
–2

17
–43
*
–27

22
–54
4
–28

23
–38
9
–7

19
–26
12
5

12
–23
14
2

2
–20
14
–4

*
–18
13
–5

*
–17
13
–3

*
93
108
–16 –175 –270
13
24
91
–3
–58
–71

–13

–28

–28

–32

–43

–39

–17

2

3

1

1 –170 –180

RECEIPTS
The Mid-Session Review (MSR) estimates
of receipts exceed the February Budget estimates by $141 billion in 2011 and by $46
billion in 2012. In each subsequent year,
the MSR estimates of receipts are below the
February Budget estimates, resulting in a net
decrease in receipts of $882 billion over the
10-year budget horizon (2012 through 2021).
The net increase in 2011 receipts is in large
part attributable to the effect of technical revisions based on new tax reporting data, collections to date, and other information as well
as to revised economic assumptions. The net
increase in 2012 receipts is primarily attributable to technical revisions and revisions in
the estimates of expiring provisions extended
in the adjusted baseline, which increase receipts by $51 billion and $16 billion, respectively. These increases are partially offset by
a $19 billion reduction in receipts attributable
to moving the February Budget proposals to
the MSR’s deficit reduction allowance. The net
reduction in receipts of $882 billion over the
10-year budget horizon is primarily due to a
receipt loss of $828 billion that results from
moving the February Budget proposals to the
deficit reduction allowance. The remainder of
the decrease is due largely to a receipt loss of
$394 billion attributable to revisions in the
economic forecast, partially offset by a receipt
increase of $283 billion attributable to technical revisions. Over the 10-year budget horizon,
enacted legislation and administrative actions
reduce receipts by $8 billion and revisions in
the estimates of expiring provisions extended
in the February adjusted baseline increase receipts by $64 billion.
ENACTED LEGISLATION AND
ADMINISTRATIVE ACTIONS
Changes that have resulted from enacted
legislation and administrative actions reduce
receipts from the February Budget by $1 billion in 2011, have a negligible effect in 2012,
and reduce receipts by $8 billion over the 10year budget horizon. The bulk of this reduction in receipts is due to the Comprehensive
1099 Taxpayer Protection and Repayment of
Exchange Subsidy Overpayments Act of 2011,
which repealed certain information reporting
requirements for tax purposes and modified

the limitation on repayment of advance premium assistance credits for coverage under
a qualified health plan. Other legislated tax
changes and administrative actions included
repeal of the Free Choice Voucher program
in the Department of Defense and Full-Year
Continuing Appropriations Act, and a threemonth extension of the due date for filing the
Federal highway use tax return.
REVISIONS IN EXPIRING PROVISIONS
EXTENDED IN THE ADJUSTED BASELINE
The February adjusted baseline permanently continued the 2001 and 2003 tax cuts for
middle-income taxpayers; permanently continued estate, gift, and generation-skipping
transfer taxes at 2009 parameters; and reflected permanent extension of relief from the AMT.
A reduction in the estimated cost of extending
these expiring provisions increases receipts
by $16 billion in 2012 and $64 billion over 10
years.1 The lower cost of extending these provisions is due in large part to reductions in the
economic forecast for wages and salaries and
revisions to models of receipts, which were reestimated using current collection experience
and updated tax data for prior years.
ECONOMIC CHANGES
Revisions to the economic forecast increase
receipts by $19 billion in 2011, reduce receipts
by $2 billion in 2012, and reduce receipts in
each subsequent year, for a total reduction of
$394 billion over the 10 years beginning in
2012 and running through 2021. In 2011, revisions to the economic forecast have the greatest effect on individual and corporation income
taxes, increasing those sources of receipts by
$10 billion and $7 billion, respectively. The increase in 2011 individual income tax receipts
The adjusted baseline for the Mid-Session Review
also includes extensions of the 2001 and 2003 tax
cuts for high-income taxpayers and extension of
estate tax relief at current parameters, which are
more generous than the parameters in effect in 2009.
The Mid-Session Review proposes to allow these
provisions to expire, and therefore these provisions
do not affect the Mid-Session Review policy receipt
levels.

1

15

16
is primarily attributable to increases in the
forecasts of wages and salaries and nonwage
sources of personal income. Changes in the
forecast of GDP and other economic measures
that affect the profitability of corporations
largely account for the increase in 2011 corporation income tax collections.
Over the 10-year budget horizon, revisions
in the economic forecast have the greatest
effect on individual income taxes and social
insurance and retirement receipts, reducing
collections by $283 billion and $173 billion,
respectively. Reductions in the economic forecast for wages and salaries account for most of
the downward revision in individual income
tax collections over the period. Wages and
salaries and proprietor’s income are the tax
base for Social Security and Medicare payroll
taxes, the largest component of social insurance and retirement receipts. Reductions in
Social Security and Medicare payroll taxes,
which are the net effect of reductions in the
forecast of wages and salaries and increases
in the forecast of proprietor’s income, account
for most of the 10-year reduction in social insurance and retirement receipts.
The reductions in individual income taxes
and social insurance and retirement receipts
are partially offset by increases in customs
duties of $28 billion, due to increases in the
forecast of imports, and increases in deposits
of earnings of the Federal Reserve System
of $26 billion, due to changes in the forecast
of interest rates. Revisions in the forecast of
GDP and other sources of income increase
other sources of receipts (corporation income

MID-SESSION REVIEW

taxes, excise taxes, and estate and gift taxes)
by a net $9 billion.
TECHNICAL CHANGES
Technical revisions in the estimates increase receipts by $122 billion in 2011, $51
billion in 2012, and $18 billion to $34 billion
in each subsequent year, for an increase of
$283 billion over the 10-year budget horizon.
The net increase in receipts in each year is
primarily due to upward re-estimates of individual income taxes, which are only partially
offset by downward re-estimates of corporation income taxes and social insurance and retirement receipts. The technical revisions in
both individual and corporation income taxes
are in large part attributable to more recent
collections data and revisions in the tax models based primarily on updated tax data for
prior years. More recent taxable wage data
from employer returns accounts for most of
the technical revision in social insurance and
retirement receipts.
PRESENTATION OF PROPOSALS
Net of legislative proposals that were enacted, the February Budget included proposals
estimated to reduce receipts by $1 billion in
2011, increase receipts by $19 billion in 2012,
and increase receipts in each subsequent
year, resulting in a net increase in receipts of
$828 billion over the 10-year budget horizon.
Shifting these proposals to the Mid-Session
Review’s deficit reduction allowance reduces
receipts by an equivalent amount over the 10year budget window but has no effect on the
deficit.

17

RECEIPTS

Table 5. CHANGE IN RECEIPTS
(In billions of dollars)
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
February Budget estimate �������������������������� 2,174 2,627 3,003 3,333 3,583 3,819 4,042 4,257 4,473 4,686 4,923
Changes due to enacted legislation and
administrative actions ���������������������������������
–1
*
–1
–1
–1
–1
–1
–1
–1
–1
–1
Changes due to economic and technical
revisions in provisions extended in the
adjusted baseline �����������������������������������������
*
16
–1
5
6
7
6
6
6
7
7
Changes due to revised economic
assumptions:
Individual income taxes �������������������������������
Corporation income taxes ����������������������������
Social insurance and retirement receipts ���
Customs duties ���������������������������������������������
Deposit of earnings, Federal Reserve
System ������������������������������������������������������
Other �������������������������������������������������������������
Total changes due to revised economic
assumptions ���������������������������������������

20122016

20122021

–3

–8

32

64

10
7
–1
1

–13
12
–10
2

–26
8
–16
3

–39
4
–22
3

–37
1
–23
3

–34
–2
–21
3

–29
–3
–17
3

–27
–2
–17
3

–28
–3
–17
3

–26
–7
–15
3

–25
–10
–15
2

–149
24
–93
14

–283
–1
–173
28

2
–*

7
*

8
*

4
*

2
*

1
1

1
1

1
2

1
2

1
2

1
2

21
1

26
10

19

–2

–23

–50

–54

–52

–44

–41

–42

–42

–44

–181

–394

Changes due to technical re-estimates:
Individual income taxes �������������������������������
Corporation income taxes ����������������������������
Social insurance and retirement receipts ���
Other �������������������������������������������������������������
Total changes due to technical reestimates ��������������������������������������������

123
–11
9
1

62
–6
–3
–3

30
3
–*
–1

35
–1
–2
2

36
–8
–4
2

36
–5
–5
–1

35
–8
–6
*

31
–8
–8
3

29
–7
–7
6

29
–6
–6
8

34
–5
–8
9

199
–17
–13
–*

356
–51
–48
26

122

51

31

34

27

26

20

18

22

25

30

168

283

Changes due to moving the February Budget
proposals to the deficit reduction allowance ���
Total change in receipts ���������������

1
141

–19
46

–45
–39

–28 –97 –141 –101 –100 –88 –104 –104
–40 –119 –162 –119 –117 –103 –115 –112

–331
–315

–828
–882

Mid-Session estimate ����������������������������������� 2,314 2,674 2,964 3,292 3,464 3,657 3,923 4,140 4,370 4,571 4,811
* $500 million or less.

EXPENDITURES
Outlays for 2011 are now estimated to be
$3.630 trillion, $189 billion lower than the
February Budget estimate, due largely to
reduced appropriations in the Department
of Defense and Full-Year Continuing
Appropriations Act as well as slower-thanexpected spending in a number of programs,
including veterans benefits and the purchases of GSE preferred stock. Relative to the
February Budget, total outlays have decreased
by $59 billion in 2012 and by $832 billion over
10 years. These changes are largely the effect of the caps on future discretionary budget
authority enacted in the Budget Control Act
of 2011 (BCA).
POLICY CHANGES
Changes due to Enacted Legislation
Legislation enacted since the release of the
February Budget has had a sizable, downward
impact on outlays in 2011, decreasing spending by $51 billion. Over the subsequent 10
years, 2012 through 2021, enacted legislation
reduces outlays by $997 billion. The largest of
these changes is the enactment of the BCA.
Budget Control Act of 2011. The BCA, enacted on August 2, authorized increases in the
debt ceiling and included a number of provisions that will reduce budget deficits over the
next 10 years. Reflecting the caps on discretionary budget authority enacted in the BCA
in the 2012 MSR reduces spending relative to
the February Budget by $740 billion over the
next 10 years. Additional provisions in the
BCA related to program integrity initiatives
and higher education financial assistance further reduce spending since the Budget over
10 years by $13 billion.
Full-year Appropriations for Fiscal
Year 2011. The Department of Defense and
Full-Year Continuing Appropriations Act, enacted in April, provided final appropriations
for the Department of Defense and extended
the continuing resolution funding non-defense
programs to the end of 2011 at reduced levels.
Relative to the February Budget, it reduced
outlays by $51 billion in the current year, and

is projected to reduce outlays by an additional
$49 billion from 2012 to 2021.
Changes in Administration Policy
The BCA also created the Joint Select
Committee on Deficit Reduction, which is
charged with recommending legislation by
November 23, 2011 to produce an additional
$1.5 trillion in deficit reduction over the next
10 years. As a placeholder for the recommendations of the Joint Committee, the MSR
includes an allowance for deficit reduction
equaling the Joint Committee’s $1.5 trillion
target. The Administration maintains its
support for the specific mandatory and receipt
proposals included in the February Budget,
as shown in Summary Table S-9 of the MSR,
“Mandatory and Receipt Proposals from the
February Budget.” The estimates for the
MSR shift the presentation of these proposals, along with their associated debt service
savings, into the Joint Committee allowance
to assume compliance with the requirements
of the BCA. Removing the February mandatory proposals and debt service from the MSR
outlay totals reduces spending in the MSR
relative to the February Budget by $18 billion
in 2011 but increases spending by $171 billion
over the subsequent 10 years.
The MSR also reflects the Administration’s
strengthened commitment to permanent, fiscally responsible reform to Medicare physician
payment rates. It affirms the Administration’s
commitment to permanent reform by including in the adjusted baseline the expected
costs of a zero percent update throughout the
10-year budget window, instead of the large
cuts under current law.
ESTIMATING CHANGES
Estimating changes are due to factors other
than enacted legislation or changes in policy,
including changes in economic assumptions,
discussed earlier in this Review, and changes
in technical factors. Relative to the Budget
estimate, economic and technical changes decrease estimated outlays for 2011 by $120 bil-

19

20
lion while reducing outlays by $6 billion from
2012 through 2021.
Discretionary appropriations. Outlays
for discretionary appropriations fall by $58
billion in 2011 and increase by $6 billion over
the next 10 years relative to the Budget as
a result of technical revisions. These changes reflect lower outlays in 2011 compared to
the February Budget for both security and
non-security discretionary programs. The
Departments of Defense, Education, Energy,
and Homeland Security show significantly
lower outlays in 2011 than projected in the
Budget due to technical revisions. Over the
next 10 years, spending for security programs
rises by $51 billion, which is offset by decreases in non-security related programs of $45 billion from 2012 through 2021.
Refundable Tax Credits. Changes in
technical assumptions increase estimated
outlays for refundable tax credits by $8 billion in 2011 and by $133 billion over the 10year period. Refundable tax credits are paid
out as outlays when the amount of the credit
exceeds a taxpayer’s income tax liability; the
remaining portion of the credits is recorded as
reductions in tax receipts. Most of this impact is the result of changes to estimates of
the premium assistance and earned income
tax credits. Technical changes to the models
used by Treasury to estimate these programs
resulted in more low-income filers being projected to claim these credits.
Unemployment compensation. Changes
in economic and technical assumptions decrease outlays for unemployment benefits by
$11 billion in 2011 and $17 billion in 2012.
Over the 10-year period of 2012 through 2021,
outlays are down by $117 billion relative to
the February Budget estimate. The reduction
is driven by a lower-than-expected insured
unemployment rate as well as a decline in
the average weekly unemployment benefit.
Additional technical changes arise from a respecification of the estimating equations used
in the Department of Labor’s unemployment
model.
Social Security. Estimating changes reduce outlays for Social Security by $1 billion
in 2011 but increase outlays by $112 billion
over the next 10 years. Spending increases
in both the Old Age and Survivors Insurance

MID-SESSION REVIEW

(OASI) and Disability Insurance (DI) programs are largely due to higher cost-of-living
adjustments (COLAs) starting in 2012 than
were assumed in the February Budget. These
economic changes are further amplified by increases in outlays due to lower projected mortality rates for persons ages 65 and older and
revised estimates of the effects of the recession on disability incidence.
Medicaid. Projected Federal outlays for
Medicaid decrease by $3 billion in 2011 and
by $98 billion over 10 years relative to the
February Budget estimates. The decrease
stems primarily from slower-than-expected
growth in benefits paid since February as
well as slower projected growth in the market basket and price indices used to calculate
Medicaid benefits relative to the February
Budget.
Supplemental Nutrition Assistance
Program (SNAP). Outlays for SNAP increase by $62 billion over the next 10 years
due to economic and technical factors. The
economic changes arise from a higher participation rate than was assumed in the Budget,
as well as a higher cost of food in the Thrifty
Food Plan. Technical changes to the SNAP
model as well as a correction for spending of
two-year contingency funding that was inadvertently omitted from the February Budget
also contribute to the increases.
Foreign military sales. Technical changes decrease spending related to the Foreign
Military Sales Trust Fund by $20 billion over
the next 10 years. The decrease can be attributed to an overhaul of the Defense Security
Cooperation Agency projection model to now
include statistical methods that will reduce
volatility in future projections in the sales of
U.S. defense equipment and services.
Purchases of GSE preferred stock. Lower
draws requested by Fannie Mae and Freddie
Mac from Treasury in 2011 under the Preferred
Stock Purchase Agreement, net of dividends,
resulted in $25 billion lower projected outlays
than in the February Budget. The gross draws
projected in February were $47 billion. Based
on these draws, $17 billion of dividends were
projected, resulting in net draws of $30 billion.
The actual gross draws paid were $21 billion
and the actual dividends were $16 billion, resulting in actual net draws of $5 billion.

EXPENDITURES

Veterans benefits. Estimating changes
reduce 2011 outlays for veterans compensation and pensions and readjustment benefits
by $10 billion relative to the Budget, but increase outlays by $24 billion over the next 10
years. Actual experience with Agent Orange
payments since February resulted in the lower outlay estimate for 2011. Part of the reduction in 2011 was for retroactive payments
which are now expected to be paid in 2012.
The increases beyond 2011 are also due to
higher participation and average tuition costs
in veterans education programs as well as
higher COLAs leading to higher costs in 2012
and beyond in the veterans compensation and
pension program.
Civilian and military retirement.
Economic changes comprise the majority of
the increase of $21 billion over 10 years in
spending relative to the Budget for civilian
and military retirement. The COLA of 2.8
percent now projected for 2012, up from the
0.9 percent COLA assumed in February, led
to the majority of the increases for both civilian and military retirement programs. Small
COLA decreases in the period from 2013 to
2016 offset the increase somewhat, but not
enough to counteract the 2012 increase and
the effect of the increase on all of the ensuing
years.
Medicare. Estimating changes reduce outlays for Medicare by $4 billion in 2011 and by
$4 billion over the next 10 years, most notably

21
in the earlier years of the period. Medicare
Part A and D both increase over the next 10
years, with this increase more than offset by
reductions in Part B. The main cause of the
spending increase in Part A is higher estimated payment updates for providers mainly due
to lower estimated labor productivity. Part
D spending increases are due to use of more
recent data and refined estimates for certain
populations. New population projections led
to higher enrollment projections in all three
programs, which also contributed to the increases for Medicare Part A and D. The reduction in Part B spending is due to a lower
estimate relative to the Budget of costs related to permanently overriding the reduction in
Medicare physician payments dictated by the
Sustainable Growth Rate (SGR) formula.
Net interest. Excluding the debt service
associated with enacted legislation and policy
changes, outlays for net interest are projected to increase from February by $10 billion in
2011, but to decrease from February by $140
billion over the subsequent 10 years. The increase in 2011 is due primarily to higher outlays for inflated-indexed Treasury securities,
driven by higher-than-expected growth in the
Consumer Price Index. The reductions in
subsequent years are virtually all due to the
effect of lower short- and long-term Treasury
interest rates over the next few years of the
revised MSR economic forecast, partially offset by increased debt service due to estimating changes in receipts and outlays.

22

MID-SESSION REVIEW

Table 6. CHANGE IN OUTLAYS
(In billions of dollars)
20122011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 20122016 2021
February estimate ������������������������������������������ 3,819 3,729 3,771 3,977 4,190 4,468 4,669 4,876 5,154 5,422 5,697
Changes due to enacted legislation:
Budget Control Act of 2011 ����������������������
2011 full-year appropriations �������������������
Other legislation ���������������������������������������
Debt service �����������������������������������������������
Subtotal, enacted legislation ��������������������������

–*
–51
*
–*
–51

–32
–21
–*
–*
–53

–51
–6
*
–2
–59

–72
–3
–*
–6
–81

–75
–2
–*
–11
–89

–79 –82 –87 –89 –95 –90 –309 –753
–2
–2
–2
–3
–4
–4 –35 –49
–*
–1
–1
–1
–1
–1
–1
–4
–16 –21 –26 –31 –36 –42 –35 –190
–97 –106 –116 –124 –136 –136 –379 –997

Changes due to reestimates:
Discretionary appropriations:
–56
4
26
14
2
1
*
1
1
1
1
48
Security ���������������������������������������������������
Non-security ��������������������������������������������
–2
9
–4
–6
–3
–6
–6
–8
–7
–6
–7 –11
Refundable tax credits �����������������������������
8
6
7
10
14
16
16
15
16
16
17
53
Unemployment compensation �����������������
–11 –17 –14 –11 –10 –10 –10 –11 –11 –11 –12 –62
Social Security �������������������������������������������
–1
9
11
12
13
13
13
12
11
10
8
59
Medicaid ���������������������������������������������������
–3
–3
–3
–6
–8 –10 –10 –12 –13 –14 –19 –29
Supplemental Nutrition Assistance
Program ������������������������������������������������
*
5
3
4
7
8
8
8
7
5
7
28
Foreign Military Sales Trust Fund ����������
–*
–1
1
1
*
–1
–4
–4
–4
–4
–5
*
Purchases of GSE preferred stock ������������
–25 ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........
Veterans benefits ���������������������������������������
–10
3
2
2
2
2
2
2
3
3
2
11
Civilian and military retirement �������������
–*
2
2
2
2
2
2
2
2
2
2
10
Medicare ����������������������������������������������������
–4
–8
–6
–5
–4
–3
2
3
4
4
8 –25
Other programs ����������������������������������������
–26
7
6
2
2
1
–*
–*
–*
–2
*
18
Net interest1 ���������������������������������������������
10
–5 –23 –29 –13 –11
–8
–9 –12 –13 –16 –81
Subtotal, reestimates ������������������������������������� –120
11
9
–8
4
2
4
–*
–4 –11 –13
18
Change due to moving the February
Budget proposals to the deficit reduction
allowance 2 ���������������������������������������������������
–18 –17 –27
2
18
18
21
26
33
43
55
–6
Total change in outlays �������������������������������������� –189 –59 –78 –87 –67 –77 –81 –91 –95 –104 –94 –367
Mid-Session estimate ������������������������������������� 3,630 3,670 3,693 3,891 4,123 4,391 4,588 4,785 5,060 5,317 5,603
*$500 million or less.
1
Includes debt service on all reestimates
2
Includes debt service.

51
–45
133
–117
112
–98
62
–20
.........
24
21
–4
15
–140
–6
171
–832

SUMMARY TABLES

23

.........
1,316

.........
1,293

–40
956

2,674
3,670

2012

–81
648

2,964
3,693

2013

–125
473

3,292
3,891

2014

–138
521

3,464
4,123

2015

–151
583

3,657
4,391

2016

–165
501

3,923
4,588

2017

–178
467

4,140
4,785

2018

–192
498

4,370
5,060

2019

–206
540

4,571
5,317

2020

Debt held by the public �����������������������������������������
Debt net of financial assets ����������������������������������

Budget Totals as a Percent of GDP:
Receipts �����������������������������������������������������������������
Outlays ������������������������������������������������������������������
Allowance for Joint Committee deficit reduction
target �����������������������������������������������������������������
Deficit ���������������������������������������������������������������

2012– 2012–
2016
2021

Totals

–223
568

......... –0.3% –0.5% –0.7% –0.8% –0.8% –0.8% –0.8% –0.9% –0.9% –0.9% –0.6% –0.7%
8.8%
6.1%
3.9%
2.7%
2.8%
3.0%
2.4%
2.2%
2.2%
2.3%
2.3%
3.7%
3.0%

62.8% 68.6% 72.1% 73.5% 73.2% 72.8% 72.7% 72.0% 71.4% 71.0% 70.7% 70.5%
55.0% 61.4% 64.6% 65.3% 64.5% 63.8% 63.5% 62.8% 62.2% 61.8% 61.6% 61.3%

.........
9.0%

15.1% 15.5% 17.1% 18.0% 18.9% 18.8% 18.8% 19.2% 19.3% 19.6% 19.6% 19.8% 18.3% 18.9%
24.1% 24.3% 23.4% 22.4% 22.3% 22.4% 22.6% 22.4% 22.4% 22.7% 22.8% 23.0% 22.6% 22.6%

–536 –1,500
3,181 5,755

4,811 16,050 37,865
5,603 19,767 45,120

2021

9,019 10,264 11,307 12,126 12,749 13,411 14,121 14,726 15,288 15,869 16,489 17,137
7,894 9,194 10,130 10,769 11,242 11,762 12,345 12,845 13,312 13,810 14,350 14,918

2,314
3,630

2,163
3,456

2011

Gross domestic product (GDP) ��������������������������������� 14,360 14,966 15,673 16,490 17,426 18,423 19,435 20,453 21,404 22,339 23,310 24,322

Debt held by the public �����������������������������������������
Debt net of financial assets ����������������������������������

Budget Totals in Billions of Dollars:
Receipts �����������������������������������������������������������������
Outlays ������������������������������������������������������������������
Allowance for Joint Committee deficit
reduction target ������������������������������������������������
Deficit ���������������������������������������������������������������

2010

(In billions of dollars and as a percent of GDP)

Table S–1. BUDGET TOTALS
24
MID-SESSION REVIEW

1,316
8.8%

Memorandum:
Resulting deficit levels if high-income tax cuts are
not allowed to expire ������������������������������������������������
Percent of GDP ��������������������������������������������������������
969
6.2%

956
6.1%

–76

–13
–*
–*
–13

–24
–*
–24

–40
–*
–40

1,033
6.6%

2012

* $500 million or less.
1
See Tables S-3 and S-7 for information on the adjusted baseline.

–*
1,316
8.8%

.........
–*
–*
–*

Expiration of high-income tax cuts:
Restore high-income tax rates to current law �������
Return estate tax relief to 2009 parameters ���������
Debt service �������������������������������������������������������������
Total, expiration of high-income tax cuts �����������

Resulting deficits in 2012 Mid-Session Review �����
Percent of GDP �������������������������������������������������������������

.........
.........
.........

Overseas contingency operations (OCO):
Reductions in OCO funding ������������������������������������
Debt service �������������������������������������������������������������
Total, overseas contingency operations ��������������

Total deficit reduction ������������������������������������������������

.........
.........
.........

1,316
8.8%

Joint Committee deficit reduction target:
Programmatic changes �������������������������������������������
Debt service �������������������������������������������������������������
Total, Joint Committee deficit reduction target �����

Deficit reduction proposals:

Projected deficits in the adjusted baseline 1 �����������
Percent of GDP �������������������������������������������������������������

2011

695
4.2%

648
3.9%

–207

–47
–*
–1
–47

–78
–1
–79

–80
–1
–81

855
5.2%

2013

539
3.1%

473
2.7%

–299

–54
–9
–3
–66

–103
–5
–108

–120
–5
–125

772
4.4%

2014

604
3.3%

521
2.8%

–347

–67
–10
–7
–84

–115
–11
–126

–126
–12
–138

868
4.7%

2015

684
3.5%

583
3.0%

–389

–79
–11
–11
–101

–120
–17
–136

–132
–19
–151

972
5.0%

2016

617
3.0%

501
2.4%

–428

–88
–13
–16
–117

–123
–24
–146

–138
–27
–165

928
4.5%

2017

(Deficit increases (+) or decreases (–) in billions of dollars)

596
2.8%

467
2.2%

–463

–94
–14
–21
–129

–126
–30
–156

–144
–34
–178

930
4.3%

2018

640
2.9%

498
2.2%

–500

–100
–15
–27
–142

–129
–37
–166

–150
–42
–192

998
4.5%

2019

696
3.0%

540
2.3%

–539

–106
–16
–34
–156

–132
–45
–177

–155
–51
–206

1,079
4.6%

2020

9,586
4.9%

2012–
2021

–260
–760
–31
–106
–21
–160
–311 –1,026

–439 –1,084
–33
–221
–472 –1,305

–498 –1,247
–38
–253
–536 –1,500

4,500
5.2%

2012–
2016

Totals

740
3.0%

568
2.3%

3,492
4.1%

3,181
3.7%

6,781
3.5%

5,755
3.0%

–582 –1,319 –3,831

–112
–18
–41
–171

–135
–53
–188

–163
–60
–223

1,151
4.7%

2021

Table S–2. EFFECT OF BUDGET PROPOSALS ON PROJECTED DEFICITS
SUMMARY TABLES

25

1
3,630

.........
3,456
899
191

Receipts:
Individual income taxes ������������������������������
Corporation income taxes ���������������������������

86
22
2,314

76
21
2,163
1,293
196
1,097
1,370
–77

Deficit �������������������������������������������������������������
Net interest �������������������������������������������������
Primary deficit �����������������������������������������
On-budget deficit �����������������������������������������
Off-budget surplus (–) ���������������������������������

1,316
216
1,100
1,377
–62

564
188
55
8
70
7
30

632
180
45
8
67
19
25

Social insurance and retirement receipts:
Social Security payroll taxes ����������������
Medicare payroll taxes ��������������������������
Unemployment insurance ���������������������
Other retirement ������������������������������������
Excise taxes �������������������������������������������������
Estate and gift taxes �����������������������������������
Customs duties ��������������������������������������������
Deposits of earnings, Federal Reserve
System �����������������������������������������������������
Other miscellaneous receipts ���������������������
Total receipts ������������������������������������������

1,089
194

726
484
273
–38
657
2,102
216

835
477
1,312

701
446
273
–110
644
1,954
196

816
490
1,306

2011

Mandatory programs:
Social Security ����������������������������������������
Medicare �������������������������������������������������
Medicaid �������������������������������������������������
Troubled Asset Relief Program (TARP) 3 ��
Other mandatory programs �������������������
Subtotal, mandatory programs ����������
Net interest �������������������������������������������������
Adjustments to reflect possible
emergencies 4 �������������������������������������������
Total outlays �������������������������������������������

Appropriated (“discretionary”) programs: 2
Security ��������������������������������������������������
Non-security ������������������������������������������
Subtotal, appropriated programs �������

Outlays:

2010

1,033
235
798
1,098
–65

73
19
2,661

651
200
55
8
79
12
34

1,196
333

3
3,694

768
478
266
17
602
2,132
235

883
440
1,324

2012

855
297
557
918
–63

55
19
2,918

721
215
59
8
87
13
37

1,294
408

7
3,773

813
524
285
12
559
2,192
297

883
394
1,277

2013

772
391
381
836
–63

44
52
3,229

762
232
62
8
97
15
39

1,437
481

8
4,001

858
554
348
6
579
2,344
391

874
384
1,258

2014

868
491
378
932
–64

40
69
3,387

804
246
64
9
102
16
42

1,566
429

9
4,255

907
580
386
5
616
2,493
491

875
387
1,262

2015

(In billions of dollars)

972
572
400
1,050
–78

39
74
3,566

861
264
65
9
104
17
43

1,694
396

9
4,538

959
631
421
2
668
2,681
572

887
389
1,276

2016

928
653
275
1,008
–79

43
78
3,822

908
279
61
9
108
18
46

1,822
451

10
4,750

1,015
654
451
1
671
2,791
653

903
394
1,297

2017

930
722
208
1,012
–82

47
82
4,032

958
294
59
9
115
19
48

1,945
455

10
4,963

1,074
678
480
*
674
2,907
722

922
401
1,323

2018

998
789
209
1,076
–78

50
87
4,255

1,007
309
61
9
128
21
51

2,064
467

10
5,253

1,138
738
514
*
713
3,103
789

942
410
1,352

2019

Table S–3. ADJUSTED BASELINE BY CATEGORY 1

1,079
853
225
1,144
–65

53
93
4,449

1,051
323
60
10
134
22
53

2,185
466

10
5,528

1,206
794
547
*
737
3,284
853

962
419
1,381

2020

1,151
917
234
1,208
–57

54
99
4,681

1,104
340
61
10
140
23
55

2,307
487

10
5,831

1,278
852
586
.........
779
3,495
917

982
427
1,410

2021

4,500
1,986
2,514
4,834
–334

252
235
15,760

3,800
1,156
305
43
469
73
195

7,187
2,045

36
20,260

4,305
2,766
1,705
42
3,024
11,843
1,986

4,402
1,993
6,396

2012–
2016

9,586
5,920
3,666
10,282
–695

499
674
36,999

8,827
2,700
608
89
1,094
176
448

17,511
4,372

86
46,585

10,015
6,482
4,284
43
6,598
27,422
5,920

9,114
4,044
13,158

2012–
2021

Totals

26
MID-SESSION REVIEW

2011

2012

850
362
1,212

2013

865
369
1,234

2014

881
377
1,257

2015

897
384
1,281

2016

917
392
1,308

2017

936
401
1,337

2018

956
410
1,366

2019

976
419
1,395

2020

997
428
1,425

2021

4,338
1,852
6,190

2012–
2016

9,119
3,901
13,021

2012–
2021

Totals

* $500 million or less.
1
See Table S–7 for information on adjustments to the Budget Enforcement Act (BEA) baseline.
2
Discretionary spending levels other than overseas contingency operations reflect the budget authority caps under the Budget Control Act of 2011. The split of discretionary spending between security and non-security after 2013 is based on increasing budget authority in each category by the growth rate in the aggregate discretionary
cap.
3
Outlays for TARP in 2011 and subsequent years result from obligations incurred through October 3, 2010 for the Home Affordable Modification Program and other
TARP programs.
4
These amounts represent a placeholder for major disasters requiring Federal assistance for relief and reconstruction. Such assistance might be provided in the form
of discretionary or mandatory outlays or tax relief. These amounts are included as outlays for convenience.

Memorandum, budget authority for appropriated programs: 2
Security ��������������������������������������������������������
857
847
845
Non-security �����������������������������������������������
401
370
360
Total, appropriated funding �������������������
1,258 1,218 1,205

2010

(In billions of dollars)

Table S–3. ADJUSTED BASELINE BY CATEGORY—Continued
SUMMARY TABLES

27

–38
657
2,102
216
1
3,630

–110
644
1,954
196
.........
3,456
899
191

Receipts:
Individual income taxes ���������������������������
Corporation income taxes ������������������������

86
22
2,314

76
21
2,163
.........
1,293
196
1,097

Allowance for Joint Committee deficit
reduction target 4 ����������������������������������

Deficit ����������������������������������������������������������
Net interest 4 ���������������������������������������������
Primary deficit/surplus (–) �����������������

1,316
216
1,100

.........

564
188
55
8
70
7
30

632
180
45
8
67
19
25

Social insurance and retirement receipts:
Social Security payroll taxes �������������
Medicare payroll taxes �����������������������
Unemployment insurance ������������������
Other retirement ���������������������������������
Excise taxes ����������������������������������������������
Estate and gift taxes ��������������������������������
Customs duties �����������������������������������������
Deposits of earnings, Federal Reserve
System ��������������������������������������������������
Other miscellaneous receipts ������������������
Total receipts ���������������������������������������

1,089
194

726
484
273

835
477
1,312

701
446
273

816
490
1,306

2011

Mandatory programs:
Social Security �������������������������������������
Medicare ����������������������������������������������
Medicaid ����������������������������������������������
Troubled Asset Relief Program
(TARP) 2 �������������������������������������������
Other mandatory programs ����������������
Subtotal, mandatory programs �������
Net interest ����������������������������������������������
Adjustments to reflect possible
emergencies 3 ����������������������������������������
Total outlays ����������������������������������������

Appropriated (“discretionary”) programs: 1
Security �����������������������������������������������
Non-security ���������������������������������������
Subtotal, appropriated programs ����

Outlays:

2010

956
234
722

–40

73
19
2,674

651
200
55
8
79
12
34

1,209
333

3
3,670

17
602
2,132
235

768
478
266

860
440
1,300

2012

648
295
353

–81

55
19
2,964

721
215
59
8
87
13
37

1,341
408

7
3,693

12
559
2,192
296

813
524
285

805
394
1,199

2013

473
378
95

–125

44
52
3,292

762
232
62
8
97
24
39

1,491
481

8
3,891

6
579
2,344
384

858
554
348

771
384
1,155

2014

521
461
60

–138

40
69
3,464

804
246
64
9
102
26
42

1,633
429

9
4,123

5
616
2,493
473

907
580
386

761
387
1,147

2015

(In billions of dollars)

583
525
58

–151

39
74
3,657

861
264
65
9
104
28
43

1,773
396

9
4,391

2
668
2,681
545

959
631
421

768
388
1,156

2016

501
587
–86

–165

43
78
3,923

908
279
61
9
108
31
46

1,910
451

10
4,588

1
671
2,791
613

1,015
654
451

781
393
1,174

2017

467
636
–169

–178

47
82
4,140

958
294
59
9
115
33
48

2,039
455

10
4,785

*
674
2,907
671

1,074
678
480

797
401
1,198

2018

498
682
–184

–192

50
87
4,370

1,007
309
61
9
128
36
51

2,164
467

10
5,060

*
713
3,103
724

1,138
738
514

813
410
1,223

2019

Table S–4. PROPOSED BUDGET BY CATEGORY

540
724
–184

–206

53
93
4,571

1,051
323
60
10
134
38
53

2,291
466

10
5,317

*
737
3,284
775

1,206
794
547

830
419
1,248

2020

4,305
2,766
1,705

3,964
1,993
5,957

568
763
–195

–223

54
99
4,811

1,104
340
61
10
140
41
55

2,420
487

10
5,603

3,181
1,893
1,287

–536

252
235
16,050

3,800
1,156
305
43
469
104
195

7,447
2,045

36
19,767

.........
42
779
3,024
3,495 11,843
824
1,932

1,278
852
586

847
427
1,274

2021

5,755
5,286
469

–1,500

499
674
37,865

8,827
2,700
608
89
1,094
282
448

18,271
4,372

86
45,120

43
6,598
27,422
5,539

10,015
6,482
4,284

8,031
4,043
12,074

2012–
2021

Totals
2012–
2016

28
MID-SESSION REVIEW

748
369
1,117

536
–63

2014

761
376
1,137

585
–64

2015

775
384
1,159

661
–78

2016

791
392
1,183

580
–79

2017

807
401
1,208

549
–82

2018

824
410
1,234

576
–78

2019

841
419
1,260

606
–66

2020

858
428
1,286

625
–57

2021

3,831
1,851
5,682

3,513
–332

7,952
3,900
11,852

6,449
–694

2012–
2021

Totals
2012–
2016

* $500 million or less.
1
Discretionary spending levels other than overseas contingency operations reflect the budget authority caps under the Budget Control Act of 2011. The split of discretionary spending between security and non-security after 2013 is based on increasing budget authority in each category by the growth rate in the aggregate discretionary
cap.
2
Outlays for TARP in 2011 and subsequent years result from obligations incurred through October 3, 2010 for the Home Affordable Modification Program and other
TARP programs.
3
These amounts represent a placeholder for major disasters requiring Federal assistance for relief and reconstruction. Such assistance might be provided in the form
of discretionary or mandatory outlays or tax relief. These amounts are included as outlays for convenience.
4
Includes debt service on Joint Committee proposals.

736
362
1,098

2013

Memorandum, budget authority for appropriated programs: 1
Security �����������������������������������������������������
857
847
811
Non-security ��������������������������������������������
401
370
360
Total, appropriated funding ����������������
1,258
1,218
1,170

1,377
–62

2012
710
–63

1,370
–77

2011
1,020
–64

On-budget deficit ��������������������������������������
Off-budget surplus (–) ������������������������������

2010

(In billions of dollars)

Table S–4. PROPOSED BUDGET BY CATEGORY—Continued
SUMMARY TABLES

29

5.7
3.4
9.1
4.9
3.1
1.9
–0.8
4.5
13.6
1.4
.........
24.1
6.3
1.3
4.4
1.3
0.3
0.1
0.5
0.1
0.2
0.5
0.1
15.1
.........
9.0
1.4
7.6
9.5
–0.5

Appropriated (“discretionary”) programs: 1
Security ���������������������������������������������������������������
Non-security �������������������������������������������������������
Subtotal, appropriated programs ��������������������

Mandatory programs:
Social Security �����������������������������������������������������
Medicare ��������������������������������������������������������������
Medicaid ��������������������������������������������������������������
Troubled Asset Relief Program (TARP) 2 �����������
Other mandatory programs ��������������������������������
Subtotal, mandatory programs �����������������������
Net interest ��������������������������������������������������������������
Adjustments to reflect possible emergencies 3 ��������
Total outlays ��������������������������������������������������������

Receipts:
Individual income taxes �������������������������������������������
Corporation income taxes ����������������������������������������

Social insurance and retirement receipts:
Social Security payroll taxes �����������������������������
Medicare payroll taxes ���������������������������������������
Unemployment insurance ����������������������������������
Other retirement �������������������������������������������������
Excise taxes ��������������������������������������������������������������
Estate and gift taxes ������������������������������������������������
Customs duties ���������������������������������������������������������
Deposits of earnings, Federal Reserve System �������
Other miscellaneous receipts ����������������������������������
Total receipts �������������������������������������������������������

Allowance for Joint Committee deficit
reduction target 4 ��������������������������������������������������

Deficit ��������������������������������������������������������������������������
Net interest 4 �������������������������������������������������������������
Primary deficit/surplus (–) ���������������������������������
On-budget deficit ������������������������������������������������������
Off-budget surplus (–) ����������������������������������������������

Outlays:

2010

8.8
1.4
7.4
9.2
–0.4

.........

3.8
1.3
0.4
0.1
0.5
0.1
0.2
0.6
0.1
15.5

7.3
1.3

4.8
3.2
1.8
–0.3
4.4
14.0
1.4
*
24.3

5.6
3.2
8.8

2011

6.1
1.5
4.6
6.5
–0.4

–0.3

4.2
1.3
0.4
0.1
0.5
0.1
0.2
0.5
0.1
17.1

7.7
2.1

4.9
3.1
1.7
0.1
3.8
13.6
1.5
*
23.4

5.5
2.8
8.3

2012

3.9
1.8
2.1
4.3
–0.4

–0.5

4.4
1.3
0.4
0.1
0.5
0.1
0.2
0.3
0.1
18.0

8.1
2.5

4.9
3.2
1.7
0.1
3.4
13.3
1.8
*
22.4

4.9
2.4
7.3

2013

2.7
2.2
0.5
3.1
–0.4

–0.7

4.4
1.3
0.4
*
0.6
0.1
0.2
0.3
0.3
18.9

8.6
2.8

4.9
3.2
2.0
*
3.3
13.5
2.2
*
22.3

4.4
2.2
6.6

2014

(As a percent of GDP)

2.8
2.5
0.3
3.2
–0.3

–0.8

4.4
1.3
0.3
*
0.6
0.1
0.2
0.2
0.4
18.8

8.9
2.3

4.9
3.1
2.1
*
3.3
13.5
2.6
*
22.4

4.1
2.1
6.2

2015

3.0
2.7
0.3
3.4
–0.4

–0.8

4.4
1.4
0.3
*
0.5
0.1
0.2
0.2
0.4
18.8

9.1
2.0

4.9
3.2
2.2
*
3.4
13.8
2.8
*
22.6

4.0
2.0
5.9

2016

2.4
2.9
–0.4
2.8
–0.4

–0.8

4.4
1.4
0.3
*
0.5
0.2
0.2
0.2
0.4
19.2

9.3
2.2

5.0
3.2
2.2
*
3.3
13.6
3.0
*
22.4

3.8
1.9
5.7

2017

2.2
3.0
–0.8
2.6
–0.4

–0.8

4.5
1.4
0.3
*
0.5
0.2
0.2
0.2
0.4
19.3

9.5
2.1

5.0
3.2
2.2
*
3.1
13.6
3.1
*
22.4

3.7
1.9
5.6

2018

2.2
3.1
–0.8
2.6
–0.4

–0.9

4.5
1.4
0.3
*
0.6
0.2
0.2
0.2
0.4
19.6

9.7
2.1

5.1
3.3
2.3
*
3.2
13.9
3.2
*
22.7

3.6
1.8
5.5

2019

2.3
3.1
–0.8
2.6
–0.3

–0.9

4.5
1.4
0.3
*
0.6
0.2
0.2
0.2
0.4
19.6

9.8
2.0

5.2
3.4
2.3
*
3.2
14.1
3.3
*
22.8

3.6
1.8
5.4

2020

2.3
3.1
–0.8
2.6
–0.2

–0.9

4.5
1.4
0.3
*
0.6
0.2
0.2
0.2
0.4
19.8

9.9
2.0

5.3
3.5
2.4
.........
3.2
14.4
3.4
*
23.0

3.5
1.8
5.2

2021

Table S–5. PROPOSED BUDGET BY CATEGORY AS A PERCENT OF GDP
Averages

3.7
2.1
1.6
4.1
–0.4

–0.6

4.3
1.3
0.3
*
0.5
0.1
0.2
0.3
0.3
18.3

8.5
2.3

4.9
3.2
1.9
0.1
3.5
13.5
2.2
*
22.6

4.6
2.3
6.9

3.0
2.6
0.4
3.4
–0.4

–0.7

4.4
1.3
0.3
*
0.5
0.1
0.2
0.3
0.3
18.9

9.1
2.2

5.0
3.2
2.1
*
3.3
13.7
2.7
*
22.6

4.1
2.1
6.2

2012– 2012–
2016
2021

30
MID-SESSION REVIEW

2011

8.8

8.1

7.5

5.2
2.3

2012

6.7

4.5
2.2

2013

6.4

4.3
2.1

2014

6.2

4.1
2.0

2015

6.0

4.0
2.0

2016

5.8

3.9
1.9

2017

5.6

3.8
1.9

2018

5.5

3.7
1.8

2019

5.4

3.6
1.8

2020

5.3

3.5
1.8

2021

Averages

6.5

4.4
2.1

6.0

4.1
2.0

2012– 2012–
2016
2021

*0.05 percent of GDP or less.
1
Discretionary spending levels other than overseas contingency operations reflect the budget authority caps under the Budget Control Act of 2011. The split of
discretionary spending between security and non-security after 2013 is based on increasing budget authority in each category by the growth rate in the aggregate discretionary cap.
2
Outlays for TARP in 2011 and subsequent years result from obligations incurred through October 3, 2010 for the Home Affordable Modification Program and other
TARP programs.
3
These amounts represent a placeholder for major disasters requiring Federal assistance for relief and reconstruction. Such assistance might be provided in the form
of discretionary or mandatory outlays or tax relief. These amounts are included as outlays for convenience.
4
Includes debt service on Joint Committee proposals.

Subtotal, appropriated programs �����������������������

Memorandum, budget authority for appropriated programs: 1
Security ���������������������������������������������������������������������
6.0
5.7
Non-security ������������������������������������������������������������
2.8
2.5

2010

(As a percent of GDP)

Table S–5. PROPOSED BUDGET BY CATEGORY AS A PERCENT OF GDP—Continued
SUMMARY TABLES

31

860
440
1,300
768
478
266
17
602
2,132
235
3
3,670
1,209
333
651
200
55
8
79
12
34
73
19
2,674
–40
956
234
722
1,020
–64

Appropriated ("discretionary") programs: 1
Security ���������������������������������������������������������������������������������
Non-security �������������������������������������������������������������������������
Subtotal, appropriated programs �������������������������������������

Mandatory programs:
Social Security �����������������������������������������������������������������������
Medicare ��������������������������������������������������������������������������������
Medicaid ��������������������������������������������������������������������������������
Troubled Asset Relief Program (TARP)2 ������������������������������
Other mandatory programs ��������������������������������������������������
Subtotal, mandatory programs ����������������������������������������
Net interest �������������������������������������������������������������������������������
Adjustments to reflect possible emergencies3 ��������������������������
Total outlays ��������������������������������������������������������������������������

Receipts:
Individual income taxes ������������������������������������������������������������
Corporation income taxes ���������������������������������������������������������

Social insurance and retirement receipts:
Social Security payroll taxes �����������������������������������������������
Medicare payroll taxes ���������������������������������������������������������
Unemployment insurance ����������������������������������������������������
Other retirement �������������������������������������������������������������������
Excise taxes �������������������������������������������������������������������������������
Estate and gift taxes �����������������������������������������������������������������
Customs duties ��������������������������������������������������������������������������
Deposits of earnings, Federal Reserve System ������������������������
Other miscellaneous receipts ���������������������������������������������������
Total receipts �������������������������������������������������������������������������

Allowance for Joint Committee deficit reduction target4 

Deficit �������������������������������������������������������������������������������������������
Net interest4 �������������������������������������������������������������������������������
Primary deficit/surplus (–) ��������������������������������������������������
On-budget deficit �����������������������������������������������������������������������
Off-budget surplus (–) ���������������������������������������������������������������

Outlays:

2012

629
286
343
690
–61

–79

701
209
58
8
85
13
36
54
19
2,880

1,303
396

790
509
277
11
543
2,130
287
7
3,589

782
383
1,165

2013

447
357
90
506
–59

–118

719
219
59
8
92
22
37
41
49
3,108

1,408
454

810
523
328
6
546
2,213
362
8
3,673

728
362
1,090

2014

477
422
55
536
–59

–127

737
225
58
8
94
24
38
37
63
3,173

1,496
393

831
531
353
4
565
2,285
434
8
3,777

697
354
1,051

2015

518
467
51
588
–69

–134

766
234
58
8
92
25
39
35
66
3,252

1,577
352

853
561
374
2
594
2,384
484
8
3,905

683
345
1,028

2016

(In billions of constant dollars, adjusted for population growth)

432
506
–74
500
–69

–142

783
240
53
8
94
27
39
37
67
3,384

1,647
389

875
564
389
1
578
2,407
529
8
3,958

673
339
1,013

2017

391
533
–141
460
–69

–149

802
246
49
8
96
28
40
39
68
3,465

1,706
381

899
568
402
*
564
2,433
561
8
4,005

667
336
1,002

2018

404
554
–149
468
–64

–156

817
251
50
8
104
29
41
41
71
3,548

1,757
379

924
599
417
*
579
2,519
588
8
4,108

660
333
993

2019

425
570
–145
477
–52

–162

828
254
47
7
105
30
42
42
73
3,601

1,805
367

950
625
431
*
581
2,587
610
8
4,188

654
330
983

2020

434
584
–149
478
–44

–171

844
260
47
8
107
31
42
41
76
3,677

1,850
372

976
651
448
.........
595
2,671
630
8
4,282

647
327
974

2021

Table S–6. PROPOSED BUDGET IN POPULATION- AND INFLATION-ADJUSTED DOLLARS
32
MID-SESSION REVIEW

1.00

Memorandum, index of population growth and inflation �����
1.03

715
352
1,067

2013

1.06

706
349
1,055

2014

1.09

697
345
1,042

2015

1.12

689
341
1,030

2016

1.16

682
338
1,020

2017

1.19

675
335
1,011

2018

1.23

669
333
1,002

2019

1.27

662
330
992

2020

1.31

656
327
983

2021

* $500 million or less.
1
Discretionary spending levels other than overseas contingency operations reflect the budget authority caps under the Budget Control Act of 2011. The split of discretionary spending between security and non-security after 2013 is based on increasing budget authority in each category by the growth rate in the aggregate discretionary
cap.
2
Outlays for TARP in 2011 and subsequent years result from obligations incurred through October 3, 2010 for the Home Affordable Modification Program and other
TARP programs.
3
These amounts represent a placeholder for major disasters requiring Federal assistance for relief and reconstruction. Such assistance might be provided in the form
of discretionary or mandatory outlays or tax relief. These amounts are included as outlays for convenience.
4
Includes debt service on Joint Committee proposals.

811
360
1,170

Memorandum, budget authority for appropriated
programs: 1
Security ��������������������������������������������������������������������������������������
Non-security �����������������������������������������������������������������������������
Subtotal, appropriated programs �����������������������������������������

2012

(In billions of constant dollars, adjusted for population growth)

Table S–6. PROPOSED BUDGET IN POPULATION- AND
INFLATION-ADJUSTED DOLLARS—Continued
SUMMARY TABLES

33

.........
.........
1

.........
.........
.........

.........
.........

.........
.........
.........

Make program integrity adjustments ������������������
Subtotal ������������������������������������������������������������

Adjustment to reflect costs of possible
emergencies 2 �����������������������������������������������������

.........
*
2

.........
.........
.........
.........
1,293

Total program adjustments ����������������������������������

Debt service on adjustments ��������������������������������
Total adjustments ��������������������������������������������

Adjusted baseline deficit �������������������������������������

1,033

22

*

22

.........

54

–54

3

–27

–1

.........

–27

46

-*

13

2

14

18

1,011

2012

855

201

2

199

.........

50

–50

7

–57

–3

.........

–54

249

-*

22

4

113

110

654

2013

772

297

11

286

.........

59

–59

8

–78

–4

.........

–74

356

3

23

33

191

106

475

2014

868

342

27

314

.........

60

–60

9

–92

–4

.........

–87

397

8

25

37

206

121

526

2015

972

387

44

343

.........

60

–60

9

–102

–6

.........

–97

436

8

28

41

221

139

585

2016

928

435

63

372

.........

61

–61

10

–110

–6

.........

–104

473

7

30

45

232

159

493

2017

930

481

84

398

.........

64

–64

10

–119

–7

.........

–112

506

6

33

49

238

180

449

2018

998

530

105

425

.........

65

–65

10

–128

–8

.........

–120

542

6

36

53

245

202

468

2019

1,079

584

130

454

.........

66

–66

10

–137

–9

.........

–128

581

6

40

57

252

227

495

2020

1,151

640

156

484

.........

67

–67

10

–147

–9

.........

–138

622

6

43

60

260

252

510

2021

4,500

1,249

84

1,165

.........

282

–282

36

–356

–17

.........

–339

1,485

18

111

118

744

494

3,251

20122016

9,586

3,921

623

3,298

.........

606

–606

86

–997

–56

.........

–942

4,210

50

293

382

1,971

1,513

5,666

20122021

Totals

*$500 million or less.
1
OMB is in the process of developing its estimate of the 10-year average calculation for disaster relief pursuant to section 251(b)(2)(D) of the BCA. OMB's estimate of
the maximum adjustment for 2012 will be transmitted to the Congress when OMB submits its report in compliance with section 251(b)(2)(D)(ii) of the BCA.
2
These amounts represent a placeholder for major disasters requiring Federal assistance for relief and reconstruction. Such assistance might be provided in the form
of discretionary or mandatory outlays or tax relief. These amounts are included as outlays for convenience.

1,316

2

46

41

Add outlays to mandatory category ���������������������
Subtotal ������������������������������������������������������������

–46

–41

Remove outlays from appropriated category �������

Reclassify surface transportation outlays:

*

.........

.........

Make disaster relief cap adjustments ����������������
1

.........

.........

1

.........

Set discretionary budget authority at cap levels �����

Adjustments for provisions contained in the
Budget Control Act:

.........

.........

1,314

2011

.........

.........

Adjustments for current policy:
Index to inflation the 2011 parameters of the
AMT �������������������������������������������������������������������

Continue the 2001 and 2003 tax cuts ������������������
Extend estate, gift, and generation-skipping
transfer taxes at current parameters ��������������
Prevent reduction in Medicare physician
payments �����������������������������������������������������������
Reflect incremental cost of funding existing Pell
maximum grant award �������������������������������������
Subtotal ������������������������������������������������������������

1,293

BEA baseline deficit ����������������������������������������������

2010

(Deficit increases (+) or decreases (–) in billions of dollars)

Table S–7. BRIDGE FROM BUDGET ENFORCEMENT ACT BASELINE TO ADJUSTED BASELINE
34
MID-SESSION REVIEW

–*
–20
1
–*
–19

–19
–*
12
–7

–123
–56
–3

Revisions due to enacted legislation:
Budget Control Act �������������������������������
2011 full-year appropriations ���������������
Other legislative changes ���������������������
Debt service �������������������������������������������
Subtotal, enacted legislation ������������

Revisions due to updated economic
assumptions:
Receipts ������������������������������������������������
Mandatory outlays �������������������������������
Net interest ������������������������������������������
Subtotal, economic revisions ������������

Revisions due to updated technical
assumptions:
Receipts �������������������������������������������������

Discretionary outlays:
Security ����������������������������������������������
Non-security ���������������������������������������

Mandatory outlays:
Refundable tax credits �����������������������
Unemployment compensation ����������
Social Security ������������������������������������
Medicaid ��������������������������������������������
Medicare ���������������������������������������������
Supplemental Nutrition Assistance
Program ������������������������������������������
Purchases of GSE preferred stock �����
Veterans benefits ��������������������������������
Other ���������������������������������������������������

13
*
26

.........
*
*

6
–15
–2
–3
–4
5
.........
3
8

8
–11
–2
–3
–4
*
–25
–10
–24

16
26

–67

2
14
–2
14

–26
–37
–*
–*
–63

13

1,090
6.9%

*

1,597
10.6%

2012

Conceptual changes in the baseline:
Extend expiring high-income tax cuts
and current estate tax relief �������������
Extend expiring Medicare physician
payment relief �����������������������������������
Debt service �������������������������������������������
Subtotal, conceptual changes ������������

February deficits in the adjusted
baseline ����������������������������������������������������
Percent of GDP ������������������������������������������

2011

4
.........
1
7

8
–13
–2
–3
–1

30
12

–30

23
17
–14
27

–50
–38
2
–2
–89

22
1
69

47

846
5.1%

2013

3
.........
1
2

11
–12
–2
–5
–*

18
9

–39

50
20
–15
55

–78
–36
2
–7
–119

23
4
91

63

770
4.3%

2014

5
.........
1
1

15
–11
–1
–7
*

12
8

–33

54
21
2
78

–97
–32
1
–14
–141

25
10
112

77

841
4.5%

2015

5
.........
1
–1

16
–11
*
–8
1

13
8

–32

52
22
9
83

–108
–33
1
–21
–161

28
15
134

91

938
4.7%

2016

(In billions of dollars)

5
.........
2
–5

16
–10
1
–9
3

15
8

–27

44
22
15
81

–116
–34
1
–29
–178

30
22
153

101

890
4.3%

2017

4
.........
2
–6

16
–9
1
–10
5

18
7

–24

41
21
19
81

–124
–35
1
–38
–196

33
29
169

108

891
4.1%

2018

3
.........
2
–6

16
–9
1
–12
6

21
7

–28

42
21
23
86

–133
–36
1
–47
–215

36
37
187

115

960
4.2%

2019

1
.........
2
–8

17
–10
1
–13
6

24
7

–32

42
22
27
91

–143
–38
1
–56
–235

40
45
207

122

1,045
4.4%

2020

–*
.........
2
–6

18
–11
2
–17
8

27
7

–37

44
26
30
100

–153
–38
1
–67
–257

43
55
228

130

1,116
4.5%

2021

Table S–8. CHANGE IN THE ADJUSTED BASELINE FROM BUDGET TO MSR

22
.........
7
18

56
–62
–7
–25
–4

89
63

–200

181
96
–20
257

–359
–175
6
–44
–573

111
30
432

290

35
.........
17
–13

139
–112
–2
–87
24

193
99

–347

394
209
93
696

–1,028
–357
12
–281
–1,654

293
218
1,377

866

20122021

Totals
20122016

SUMMARY TABLES

35

1,316
8.8%

MSR deficits in the adjusted baseline ����
Percent of GDP ������������������������������������������

–82
1,205

–2
–11
–13
1,218

MSR funding for appropriated programs �����

*$500 million or less.

Total change in funding ����������������

–19
–63

1,231

Change in funding:
Security ����������������������������������������������
Non-security ���������������������������������������

1,287

1,033
6.6%

–3
–3
–35
–58

2012

February funding ("budgetary resources")
for appropriated programs �������������������

Memorandum:

–2
–2
–255
–281

Net interest ������������������������������������������
Costs of possible emergencies ���������������
Subtotal, technical revisions ������������
Total changes since February ��������������������

2011

–95
1,212

–33
–62

1,307

855
5.2%

–9
–1
1
8

2013

–103
1,234

–37
–65

1,337

772
4.4%

–13
–*
–25
2

2014

–108
1,257

–41
–67

1,366

868
4.7%

–12
–*
–21
27

2015

–115
1,281

–45
–70

1,396

972
5.0%

–15
–*
–22
34

2016

(In billions of dollars)

–119
1,308

–47
–72

1,428

928
4.5%

–15
–*
–16
39

2017

–125
1,337

–50
–75

1,461

930
4.3%

–18
.........
–15
40

2018

–130
1,366

–53
–77

1,496

998
4.5%

–22
.........
–20
38

2019

–137
1,395

–56
–81

1,532

1,079
4.6%

–25
.........
–29
34

2020

–145
1,425

–60
–85

1,569

1,151
4.7%

–29
.........
–37
35

2021

–503

–175
–328

–52
–6
–102
14

20122016

–1,158

–441
–717

–161
–6
–220
199

20122021

Totals

Table S-8. CHANGE IN THE ADJUSTED BASELINE FROM BUDGET TO MSR—Continued
36
MID-SESSION REVIEW

9,959

866

.........

Pay for Three Years of AMT Relief:
Reduce the value of certain tax
expenditures�����������������������������������������������

10,459

16
863
997

116
2

425
9,219

731

8,063

.........

9,582
11,994

.........

638
650

81
1,043

2013

734

32
860
1,077

183
2

100
10,073

1,089

8,884

.........

5,405
19,687

.........

1,043
10,772

1,422
1,045

2014

372

52
839
1,129

234
4

25
10,871

1,138

9,708

.........

9,416
23,832

.........

1,100
10,832

1,442
1,042

2015

158

71
815
1,152

263
3

25
11,123

578

10,520

.........

12,964
28,264

.........

1,240
11,552

1,469
1,039

2016

61

94
186
555

272
3

.........
11,621

120

11,318

183

14,688
30,213

.........

1,448
11,533

1,509
1,035

2017

95

116
–383
.........

264
3

.........
12,596

–73

12,103

566

15,119
30,767

.........

1,704
11,364

1,544
1,036

2018

122

139
–374
11

243
3

.........
13,827

–115

12,887

1,055

15,586
32,324

.........

2,015
12,111

1,579
1,033

2019

169

162
–329
6

170
3

.........
15,209

–64

13,686

1,587

16,158
33,294

.........

2,381
12,117

1,610
1,028

2020

192

185
–273
–22

63
3

.........
16,498

–27

14,499

2,026

16,885
35,037

.........

2,809
12,665

1,657
1,021

2021

.........

14,378
93,596

12,313
9,605

2012–
2021

5,417

3,661

21,682

176
3,656
4,703

858
13

22,321

872
2,483
5,253

1,870
28

1,025
1,025
46,630 116,381

3,820

41,785 106,278

.........

45,235 123,671
91,928 253,563

.........

4,021
33,806

4,414
4,452

2012–
2016

Totals

–6,008 –18,996 –26,418 –29,766 –32,696 –35,699 –38,644 –41,496 –44,388 –47,180–113,884–321,291

5
279
348

1
.........
43

450
5,344

.........
.........

62
2

284

.........

41
1

4,610

7,868
8,151

.........
.........

.........

.........

.........

.........

.........
.........

.........
.........

.........

.........
283

.........
.........

2012

Incentives to promote regional growth:
Extend and modify the New Markets tax
credit��������������������������������������������������������������
Reform and extend Build America bonds1�������
Reform and expand the Low-Income Housing
Tax Credit (LIHTC)��������������������������������������
Designate Growth Zones1���������������������������������
Total, incentives to promote regional growth
Continue certain expiring provisions
through calendar year 20121��������������������

Tax Cuts for Businesses:
Eliminate capital gains taxation on
investments in small business stock������������
Enhance and make permanent the research
and experimentation tax credit��������������������
Provide additional tax credits for investment
in qualified property used in a qualified
advanced energy manufacturing project�����
Provide tax credit for energy efficient
commercial building property expenditures
in place of existing tax deduction�����������������
Total, tax cuts for businesses������������������������

Tax Cuts for Families and Individuals:
Extend earned income tax credit for larger
families1���������������������������������������������������������
Expand child and dependent care tax credit1��
Provide for automatic enrollment in IRAs,
including employer tax credit, and double
the tax credit for small employer plan
startup costs1�������������������������������������������������
Extend American opportunity tax credit1��������
Provide exclusion from income for student
loan forgiveness���������������������������������������������
Tax qualified dividends and net long-term
capital gains at a 20-percent rate for upperincome taxpayers������������������������������������������
Total, tax cuts for families and individuals�

Tax Provisions:

2011

(Deficit increases (+) or decreases (–) in millions of dollars)

Table S–9. MANDATORY AND RECEIPT PROPOSALS FROM THE FEBRUARY BUDGET
SUMMARY TABLES

37

Total, reform U.S. international tax
system��������������������������������������������������

Reform U.S. international tax system:
Defer deduction of interest expense related
to deferred income�������������������������������������
Determine the foreign tax credit on a
pooling basis�����������������������������������������������
Tax currently excess returns associated
with transfers of intangibles offshore�������
Limit shifting of income through intangible
property transfers��������������������������������������
Disallow the deduction for excess non-taxed
reinsurance premiums paid to affiliates���
Limit earnings stripping by expatriated
entities��������������������������������������������������������
Modify tax rules for dual capacity taxpayers

Reinstate Superfund taxes�������������������������������
Increase Oil Spill Liability Trust Fund
financing rate by one cent����������������������������
Make unemployment insurance surtax
permanent�����������������������������������������������������
Repeal LIFO method of accounting for
inventories�����������������������������������������������������
Repeal gain limitation for dividends received
in reorganization exchanges�������������������������

Total, reform treatment of financial
institutions and products�������������������

Reform treatment of financial institutions and
products:
Impose a financial crisis responsibility
fee����������������������������������������������������������������
Require accrual of income on forward sale of
corporate stock�������������������������������������������
Require ordinary treatment of income from
day-to-day dealer activities for certain
dealers of equity options and commodities
Modify the definition of “control” for
purposes of section 249 of the Internal
Revenue Code���������������������������������������������

Other Revenue Changes and Loophole
Closers:

–29
–129
–212
–532

.........
.........
.........
.........

–364
–918

–223

–63

–2,038

–4,568

–5,138

–79

–2,598

–1,413

–46

–1,253
–1,926

–15

–226

–12

–1,000

2013

–382
–974

–237

–90

–2,114

–4,798

–5,396

–81

–5,649

–1,449

–46

–3,275
–2,038

–16

–240

–19

–3,000

2014

–401
–1,031

–250

–118

–2,212

–5,011

–5,636

–84

–6,484

–1,477

–46

–3,297
–2,093

–17

–254

–26

–3,000

2015

–421
–1,085

–264

–148

–2,280

–5,211

–5,861

–86

–6,457

–1,503

–46

–3,320
–2,144

–17

–270

–33

–3,000

2016

–442
–1,138

–277

–178

–2,290

–5,406

–6,080

–89

–6,435

–1,526

–46

–4,340
–2,185

–18

–286

–36

–4,000

2017

–464
–1,190

–289

–209

–2,231

–5,601

–3,114

–92

–6,387

–1,543

–46

–4,360
–2,212

–19

–303

–38

–4,000

2018

–487
–1,242

–302

–242

–2,158

–5,810

–1,103

–94

–6,337

–1,558

–47

–4,381
–2,246

–20

–321

–40

–4,000

2019

–512
–1,296

–315

–276

–2,138

–6,051

–1,149

–97

–6,293

–1,577

–46

–4,404
–2,272

–21

–341

–42

–4,000

2020

2012–
2016

2012–
2021

–74

–1,134

–96

–174

–2,746

–296

–451
–7,217 –15,015

–219

–377

–849

–537
–1,352

–328

–315

–2,166

–2,614

–1,668

–1,780 –4,222
–4,540 –10,758

–1,103

–448

–9,848 –20,831

–6,333 –22,243 –51,444

–1,202 –25,017 –37,665

–100

–6,240 –21,188 –52,880

–1,594

–47

–4,427 –11,304 –33,216
–2,329 –9,575 –20,819

–22

–361

–44

–4,000 –10,000 –30,000

2021

Totals

–7,747 –13,312 –13,991 –14,659 –15,270 –15,811 –13,098 –11,344 –11,737 –12,233 –64,979–129,202

–1,204

.........

.........

–2,655

–47

.........

.........

.........

.........

–2,986

–1,375

.........

.........

–35

–9

.........

.........

–144

–35

–159
–1,374

–6

–1

–36
.........

.........

2012

.........

2011

(Deficit increases (+) or decreases (–) in millions of dollars)

Table S–9. MANDATORY AND RECEIPT PROPOSALS FROM
THE FEBRUARY BUDGET—Continued
38
MID-SESSION REVIEW

–21

.........
.........

Total, reform treatment of insurance
companies and products���������������������

–6

Repeal capital gains treatment for
royalties�����������������������������������������������

.........
.........
.........
.........

.........
.........

.........

Repeal enhanced oil recovery credit������

Repeal credit for oil and gas produced
from marginal wells����������������������������

Repeal expensing of intangible drilling
costs�����������������������������������������������������

Repeal deduction for tertiary injectants

Repeal exception to passive loss
limitations for working interests in
oil and natural gas properties������������

Repeal percentage depletion for oil and
natural gas wells���������������������������������

Repeal domestic manufacturing
deduction for oil and natural gas
companies��������������������������������������������

Eliminate oil and gas preferences:

Total, eliminate coal preferences������

.........
–6

.........

Repeal percentage depletion for hard
mineral fossil fuels������������������������������

Repeal domestic manufacturing
deduction for coal and other hard
mineral fossil fuels������������������������������

.........

Repeal expensing of exploration and
development costs�������������������������������

Eliminate coal preferences:

Eliminate fossil fuel tax preferences:

–172

.........

–902

–607

–23

–6

–1,875

.........

.........

–20
–136

–11

–78

–27

–201

–8

.........

2012

Reform treatment of insurance companies and
products:
Modify rules that apply to sales of life
insurance contracts������������������������������������
Modify dividends-received deduction for life
insurance company separate accounts�����
Expand pro-rata interest expense
disallowance for corporate-owned life
insurance (COLI)���������������������������������������

2011

–1,558

–1,038

–27

–10

–2,512

.........

.........

–35
–222

–13

–129

–45

–578

–71

–465

–42

2013

–1,653

–1,079

–24

–10

–1,762

.........

.........

–38
–236

–22

–129

–47

–810

–181

–547

–82

2014

–1,749

–1,111

–22

–10

–1,403

.........

.........

–39
–249

–31

–130

–49

–949

–273

–579

–97

2015

–1,842

–1,142

–21

–10

–1,331

.........

.........

–41
–265

–38

–135

–51

–1,153

–433

–605

–115

2016

–1,932

–1,177

–19

–10

–1,124

.........

.........

–44
–276

–43

–139

–50

–1,393

–652

–607

–134

2017

(Deficit increases (+) or decreases (–) in millions of dollars)

–2,020

–1,211

–18

–9

–830

.........

.........

–45
–285

–47

–145

–48

–1,639

–900

–585

–154

2018

–2,108

–1,243

–17

–9

–640

.........

.........

–48
–295

–51

–149

–47

–2,012

–1,280

–555

–177

2019

–2,200

–1,273

–16

–9

–523

.........

.........

–49
–303

–55

–154

–45

–2,445

–1,714

–528

–203

2020

Table S–9. MANDATORY AND RECEIPT PROPOSALS FROM
THE FEBRUARY BUDGET—Continued

–2,296

–1,321

–16

–9

–447

.........

.........

–51
–312

–58

–165

–38

–2,900

–2,166

–503

–231

2021

–7,691

–5,146

–1,243

2012–
2021

.........

.........

–410
–2,579

–369

–1,353

–447

–203

–92

–7,704 –18,260

–4,977 –11,202

–117

–46

–8,883 –12,447

.........

.........

–173
–1,108

–115

–601

–219

–3,691 –14,080

–979

–2,368

–344

2012–
2016

Totals

SUMMARY TABLES

39

Require greater electronic filing of
returns������������������������������������������������
Authorize the Department of the
Treasury to require additional
information to be included in
electronically filed Form 5500
Annual Reports����������������������������������
Implement standards clarifying when
employee leasing companies can be
held liable for their clients’ Federal
employment taxes������������������������������
Increase certainty with respect to
worker classification��������������������������

Improve compliance by businesses:

Total, expand information reporting�

Require a certified Taxpayer
Identification Number from
contractors and allow certain
withholding�����������������������������������������

.........

.........

–4
–12

.........

.........
.........

–48
427

.........

.........

–21
–21

.........

.........
–7

.........
–16

475

–2,274
.........

–318
.........

.........

–3,608

–6

Require information reporting for
private separate accounts of life
insurance companies��������������������������

–3,472

–59

2012

.........

.........

Repeal and modify information
reporting on payments to
corporations and payments for
property 6���������������������������������������������

Expand information reporting:

Reduce the tax gap and make reforms:

Total, eliminate oil and gas
preferences�������������������������������������
Total, eliminate fossil fuel tax
preferences�������������������������������������������������
Tax carried (profits) interests as ordinary
income������������������������������������������������������������
Deny deduction for punitive damages�������������
Repeal lower-of-cost-or-market inventory
accounting method����������������������������������������
Simplify the tax code����������������������������������������

Increase geological and geophysical
amortization period for independent
producers to seven years��������������������

2011

–230

–5

.........

.........

–81
536

–1

618

–188
–35

–2,123
–23

–5,582

–5,360

–215

2013

–1,237

–6

.........

.........

–110
644

–2

756

–1,435
12

–2,154
–34

–5,094

–4,858

–330

2014

–956

–6

.........

.........

–115
811

–3

929

–2,334
23

–1,927
–35

–4,850

–4,601

–306

2015

–819

–6

.........

.........

–121
837

–3

961

–1,532
–141

–1,608
–35

–4,841

–4,576

–230

2016

–904

–7

.........

.........

–126
870

–4

1,000

–1,358
–147

–1,322
–36

–4,690

–4,414

–152

2017

(Deficit increases (+) or decreases (–) in millions of dollars)

–994

–7

.........

.........

–132
910

–5

1,047

–309
281

–1,089
–36

–4,448

–4,163

–75

2018

–1,088

–7

.........

.........

–138
952

–6

1,096

–323
176

–908
–37

–4,334

–4,039

–22

2019

–1,186

–8

.........

.........

–144
996

–7

1,147

–337
107

–762
–37

–4,333

–4,030

–9

2020

Table S–9. MANDATORY AND RECEIPT PROPOSALS FROM
THE FEBRUARY BUDGET—Continued

–1,140

2012–
2016

–1,408

2012–
2021

–1,284

–8

.........

.........

–150
1,022

–8

1,180

–352
138

–3,254

–27

.........

.........

–475
3,255

–9

3,739

–5,489
–148

–8,710

–64

.........

.........

–1,165
8,005

–39

9,209

–8,168
407

–640 –10,086 –14,807
–39
–127
–312

–4,411 –23,975 –46,191

–4,099 –22,867 –43,612

–10

2021

Totals

40
MID-SESSION REVIEW

–16
–13

.........
.........

.........
.........
.........
.........
–21

Require a minimum term for grantor
retained annuity trusts (GRATs)�������

Limit Duration of Generation Skipping
Transfer (GST) Tax Exemption����������

Total, modify estate and gift tax
valuation discounts and make other
reforms�����������������������������������������������

Total, reduce the tax gap and make
reforms������������������������������������������������
–563

–948

.........

–15

–806

–127

.........

–13
–13

–821

–1,077

.........

–46

–860

–171

.........

–27
–27

.........

–235
–18

.........

.........

2013

.........

.........

Trade Initiatives:
Promote trade����������������������������������������������������

Other Initiatives:
Authorize the limited sharing of business tax
return information to improve the accuracy
of important economic measures �����������������

.........

167

.........

371

–397 –17,390 –29,977

.........

Modify rules on valuation discounts������

Total, other revenue changes and loophole
closers���������������������������������������������������������

.........

Require consistency in value for
transfer and income tax purposes������

.........
.........

.........

.........

.........

.........

.........

2012

.........

Make permanent the portability of
unused exemption between spouses��

Modify estate and gift tax valuation
discounts and make other reforms:

Total, expand penalties��������������������������

Increase penalty imposed on paid
preparers who fail to comply with
EITC due diligence requirements������

Impose a penalty on failure to comply
with electronic filing requirements����

Expand penalties:

Repeal special estimated tax payment
provision for certain insurance
companies�������������������������������������������
Eliminate special rules modifying the
amount of estimated tax payments
by corporations�����������������������������������
Total, improve compliance by
businesses��������������������������������������
Strengthen tax administration���������������������

2011
.........

2016

–1,937

.........

–231

–1,823

–204

321

–34
–35

–1

–6,350 –51,278

–1,822

.........

–160

–1,687

–192

217

–32
–32

.........

–5,282 –50,115
–25
–28

–4,320 –49,290

.........

2015

–2,176

–2,069

.........

–308

–1,966

–216

421

–35
–36

–1

–911
–30

.........

.........

2017

–2,375

–2,218

.........

–389

–2,116

–229

516

–35
–36

–1

–1,001
–30

.........

.........

2018

3,029

–2,388

.........

–477

–2,277

–243

609

–36
–38

–2

4,535
–32

5,630

.........

2019

–8,473

–2,573

.........

–570

–2,444

–258

699

–37
–39

–2

–6,824
–33

–5,630

.........

2020

–3,125

–2,781

.........

–670

–2,629

–273

791

–38
–40

–2

–1,292
–34

.........

.........

2021

–2,095

3,681

–318
–327

–9

–8,774
–263

.........

.........

2012–
2021

.........

–2,959

–7,778 –20,898

–7,510 –19,539

.........

–545

–6,734 –18,166

–876

645

–137
–138

–1

–3,281
–104

.........

.........

2012–
2016

Totals

.........

514

.........

636

.........

755

.........

837

.........

910

.........

982

.........

1,053

.........

1,127

.........

2,443

.........

7,352

15,190 –44,562 –89,414 –41,554 –37,353 –30,416 –42,706 –38,299–166,153–356,481

51,234

–1,726

.........

–93

–1,558

–182

107

–31
–31

.........

52,367
–20

53,610

.........

2014

(Deficit increases (+) or decreases (–) in millions of dollars)

Table S–9. MANDATORY AND RECEIPT PROPOSALS FROM
THE FEBRUARY BUDGET—Continued
SUMMARY TABLES

41

Agriculture:
Change company reimbursement on crop
insurance CAT premium������������������������������
Eliminate cotton and peanut storage
payments�������������������������������������������������������
Enact Animal Plant and Health Inspection
Service (APHIS) fees�������������������������������������
Enact Food Safety and Inspection Service
(FSIS) performance fee���������������������������������
Enact Grain Inspection, Packers, and
Stockyards Administration (GIPSA) fees����
Enact Natural Resources Conservation
Service (NRCS) fee����������������������������������������
Enact Forest Service payment to
communities—impact on timber receipts����
Suspend SNAP time limits for able-bodied
working-age adults without dependents�����
Restore SNAP beneficiary payments
terminated in P.L. 111–296��������������������������
Reduce commodity payments to wealthy
farmers����������������������������������������������������������
Impose biobased labeling fee����������������������������
Total, Agriculture�������������������������������������������

Mandatory Initiatives and Savings:

Transportation Trust Fund:
Outlays��������������������������������������������������������������
Bipartisan financing for Transportation Trust
Fund���������������������������������������������������������������
Subtotal, transportation trust fund��������������
Upfront investment in aviation�����������������������������
Upfront investment in TIGER grants�������������������
Total, reauthorize surface transportation

Reauthorize Surface Transportation:

Eliminate certain reviews conducted by the
U.S. Treasury Inspector General for Tax
Administration (TIGTA)�������������������������������
Modify indexing to prevent deflationary
adjustments���������������������������������������������������
Total, other initiatives�����������������������������������

19,053

.........
.........

.........

2013

16,230

.........
.........

.........

2014

17,980

.........
.........

.........

2015

21,965

.........
.........

.........

2016

27,117

.........
.........

.........

2017

30,412

.........
.........

.........

2018

31,731

.........
.........

.........

2019

32,207

.........
.........

.........

2020

.........
.........

.........

2012–
2016

.........
.........

.........

2012–
2021

32,077 109,071 235,498

.........
.........

.........

2021

Totals

–161
–1
–20
–11
–27
–22
.........
90
.........
.........
.........
–152

.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........

–228
.........
–481

.........

51

–48

–22

–29

–12

–27

.........

–166

–261
.........
2,663

3,239

1

–49

–22

–30

–12

–27

.........

–176

–312
.........
–577

56

.........

–49

–22

–31

–12

–28

.........

–179

–315
.........
–640

.........

.........

–50

–22

–31

–13

–29

.........

–180

–265
.........
–594

.........

.........

–52

–22

–31

–13

–30

.........

–181

–278
.........
–559

.........

.........

.........

–22

–32

–13

–31

.........

–183

–285
.........
–568

.........

.........

.........

–22

–32

–13

–32

.........

–184

–284
.........
–569

.........

.........

.........

–22

–32

–13

–33

.........

–185

–283
.........
–572

.........

.........

.........

–22

–33

–13

–34

.........

–187

–1,116
.........
813

3,295

142

–196

–110

–148

–60

–131

–1

–862

–2,511
.........
–2,049

3,295

142

–248

–220

–308

–125

–291

–1

–1,782

......... –20,000 –28,000 –29,000 –31,000 –32,000 –34,000 –36,000 –38,000 –39,000 –41,000–140,000–328,000
......... –13,274 –8,947 –12,770 –13,020 –10,035 –6,883 –5,588 –6,269 –6,793 –8,923 –58,046 –92,502
.........
596
2,146
608
.........
.........
.........
.........
.........
.........
.........
3,350
3,350
.........
20
420
680
400
200
140
100
40
.........
.........
1,860
2,000
......... –12,658 –6,381 –11,482 –12,620 –9,835 –6,743 –5,488 –6,229 –6,793 –8,923 –52,976 –87,152

6,726

.........
.........

.........
.........

.........

.........

2012

.........

2011

(Deficit increases (+) or decreases (–) in millions of dollars)

Table S–9. MANDATORY AND RECEIPT PROPOSALS FROM
THE FEBRUARY BUDGET—Continued
42
MID-SESSION REVIEW

.........
.........
.........

Subtotal, shift future Uniformed
Services Family Health Plan
enrollees into TRICARE-For-Life/
Medicare����������������������������������������������

Provide additional accrual payments to the
Medicare Eligible Retiree Health Care
Fund (non-PAYGO)���������������������������������������

Total, Defense������������������������������������������

–2,136
–535
–578
2
2
–384

.........
–60
.........
.........
.........
.........
–60

Total, Education��������������������������������������

Energy:
Repeal ultra-deepwater oil and gas research
and development program����������������������������
Provide HomeStar rebates for energy efficient
home retrofits������������������������������������������������
Total, Energy��������������������������������������������������

–984

.........

–20
1,800
1,780

.........
300
300

–2,544

2,069

.........

–1

–117

–1

–1
.........

2012

Pell Grant Protection Act:
Provide mandatory appropriation to sustain
recent Pell Grant increases 7����������������������
Eliminate in-school interest subsidies for
graduate and professional students 8��������
Provide current borrowers incentive to
convert from guaranteed loans to direct
loans to simplify loan servicing�����������������
Eliminate year-round Pell Grants and
simplify student aid application 9��������������
Reform and expand Perkins loan program���
Overhaul TEACH Grants and replace with
Presidential Teaching Fellows�������������������
Establish College Completion Incentive
Grants���������������������������������������������������������
Accelerate the recall of the Perkins Loan
revolving fund��������������������������������������������

Education:

.........
.........

Shift future Uniformed Services Family
Health Plan enrollees into TRICARE-forLife/Medicare:
Effect on Medicare Eligible Retiree Health
Care Fund��������������������������������������������������
Effect on accrual payments (non-PAYGO)����

Defense:

2011

2,100
2,060

–40

415

–618

42

102

–604
–1,564

–20

–3,200

6,277

755

.........

755

–4
759

2013

1,020
970

–50

–2,283

–727

220

150

–711
–1,155

–16

–3,039

2,995

793

.........

793

–12
805

2014

600
570

–30

–1,696

–764

288

156

–840
–896

–10

–3,019

3,389

826

.........

826

–24
850

2015

180
170

–10

–620

–113

300

150

–995
–705

–10

–3,022

3,775

846

.........

846

–43
889

2016

.........
.........

.........

–323

–197

291

138

–1,157
–547

–10

–3,041

4,200

877

.........

877

–68
945

2017

(Deficit increases (+) or decreases (–) in millions of dollars)

.........
.........

.........

–223

–25

93

1

–1,295
–504

–11

–3,110

4,628

905

.........

905

–99
1,004

2018

.........
.........

.........

60

94

15

–54

–1,335
–494

–11

–3,211

5,056

930

.........

930

–137
1,067

2019

.........
.........

.........

454

202

.........

–67

–1,372
–473

–13

–3,312

5,489

951

.........

951

–183
1,134

2020

Table S–9. MANDATORY AND RECEIPT PROPOSALS FROM
THE FEBRUARY BUDGET—Continued

18,505

3,219

–117

3,219

–84
3,303

2012–
2016

43,864

7,849

–117

7,849

–809
8,658

2012–
2021

.........
.........

.........

1,061

342

.........

–70

–1,399
–448

–7

–2,244

5,700
5,550

–150

–6,728

–2,606

852

560

5,700
5,550

–150

–5,699

–2,190

1,251

508

–3,685 –10,243
–4,898 –7,364

–2,192

–3,343 –13,264 –29,281

5,986

967

.........

967

–238
1,205

2021

Totals

SUMMARY TABLES

43

.........

Housing and Urban Development:
Provide funding for the Affordable Housing
Trust Fund����������������������������������������������������
–25
25
.........
–138
.........
.........
–4
–3

.........
.........
.........
.........
.........
.........
.........
.........

10

240
495
18,955

.........
.........
22

Interior:
Impose fee on nonproducing oil and gas leases
Reserve funds for insular affairs assistance���
Return to net receipts sharing for energy
minerals���������������������������������������������������������
Reform coal and hardrock Abandoned Mine
Lands (AML) programs2�������������������������������
Impose hardrock mining royalty����������������������
Repeal Energy Policy Act fee prohibition and
mandatory permit funds�������������������������������
Increase Duck Stamp fees2�������������������������������
Reathorize Federal Land Sales/Acquisition
Law (FLTFA)�������������������������������������������������

220
381
342
244
2

.........
.........
22
.........
.........

.........

.........

.........

–1,571
.........

.........
.........

.........

18,602

.........

2012

Shift future Uniformed Services Family
Health Plan enrollees into TRICARE-forLIFE/Medicare:
Effect on Medicare�����������������������������������������
Reform child welfare assistance to improve
permanency and safety���������������������������������
Strengthen and expand child care assistance�
Extend TANF supplemental grants�����������������
Modernize child support program��������������������
Extend the child welfare study������������������������
Extend Transitional Medical Assistance
(TMA)�������������������������������������������������������������
Extend Qualified Individuals (QI)�������������������
Total, Health and Human Services���������������

Provide physicians relief from sustainable
growth rate formula (SGR) and offset
costs: 10
Provide SGR relief through 2013������������������
Offset cost of providing SGR relief through
2013 with specific health savings3������������
Provide SGR relief from 2014 onward����������
Offset cost of providing SGR relief from
2014 onward�����������������������������������������������

Health and Human Services:

2011

–2,676
23,207

7,210

2014

–4,759
32,072

.........

2015

–6,056
34,692

.........

2016

–6,846
36,730

.........

2017

–7,037
39,856

.........

2018

–7,275
44,760

.........

2019

.........

2021

54,405

2012–
2016

54,405

2012–
2021

–9,674 –14,164 –17,237 –62,233
49,909 54,222 89,971 315,448

.........

2020

Totals

–5

–20
.........

–386
–7

–44

–39
24

140

415
.........
28,088

245
632
64
310
4

.........

–8

–19
.........

–330
–5

–45

–59
24

290

10
.........
5,774

249
730
.........
251
.........

.........

–10

–18
.........

–204
–6

–47

–75
24

230

.........
.........
–3,471

250
749
.........
269
.........

20

–4

.........
.........

–129
–6

–47

–90
22

190

.........
.........
–4,723

250
750
.........
303
.........

30

.........

.........
.........

–81
–7

–48

–98
16

100

.........
.........
–5,440

250
750
.........
356
.........

50

.........

.........
.........

–128
–10

–50

–109
15

20

.........
.........
–5,605

250
750
.........
362
.........

70

.........

.........
.........

–145
–15

–53

–116
14

20

.........
.........
–5,933

250
750
.........
252
.........

90

250
750
.........
226
.........

150

.........

.........
.........

–100
–19

–52

–125
12

.........

.........

.........
.........

–89
–25

–55

–138
11

.........

.........
.........
.........
.........
–8,328 –12,788

250
750
.........
226
.........

120

–30

–57
–4

–1,187
–24

–183

–288
119

860

665
495
44,623

1,214
3,242
406
1,377
6

50

–30

–57
–4

–1,730
–100

–441

–874
187

1,000

665
495
6,529

2,464
6,992
406
2,799
6

530

......... –23,207 –32,072 –34,692 –36,730 –39,856 –44,760 –49,909 –54,222 –89,971–315,448

–2,175
.........

28,593

2013

(Deficit increases (+) or decreases (–) in millions of dollars)

Table S–9. MANDATORY AND RECEIPT PROPOSALS FROM
THE FEBRUARY BUDGET—Continued
44
MID-SESSION REVIEW

Veterans Affairs:
Extend veterans income verification����������������
Extend VBA authority for use of HHS data����
Reform criteria for special monthly pension���
Provide authority for vendee loan pooling�������
Expand eligibility for Vocational
Rehabilitation and Employment on-the-job
training program 5�����������������������������������������

Treasury:
Levy payments to Medicare providers with
delinquent tax debt2��������������������������������������
Offset Federal tax refunds to collect State
income taxes from debtors who currently
reside in other States������������������������������������
Levy payments to Federal contractors with
delinquent tax debt2��������������������������������������
Restructure assistance to New York City2�������
Total, Treasury�����������������������������������������������
26
4
–6
–86
.........

.........

–59
200
77

–5
.........
–22
.........
.........
.........
.........

.........

.........
3,941

.........
1,344

.........

.........
–44
36

.........
.........
.........

–64

–10
415

.........
124

–17

3,544

100

–7
.........
–152

2012

1,220

.........

Justice:
Provide incentives for State medical
malpractice reform����������������������������������������

Labor:
Give States and employers short-term
relief from interest and tax increases
and strengthen unemployment insurance
system solvency 2�������������������������������������������
Reform Federal Employees’ Compensation
Act (FECA)����������������������������������������������������
Reauthorize Trade Adjustment Assistance�����
Protect pension benefits by empowering the
PBGC Board to improve solvency����������������
Expand Foreign Labor Certification Fees��������
Expand work-sharing program2�����������������������
Enhance unemployment insurance program
integrity2,4������������������������������������������������������
Total, Labor����������������������������������������������������

.........
.........
.........

Repeal Geothermal Payments to Counties
under 2005 Energy Policy Act����������������������
Repeal “deep gas” royalty incentives����������������
Total, Interior�������������������������������������������������

2011

.........

–7
2
–10
–93

–61
200
71

.........

–68

–142
4,626

.........
.........
17

–13
713

4,051

50

–7
.........
–484

2013

50

–7
.........
–343

2015

.........

–7
.........
–261

2016

.........

–7
.........
–225

2017

–2,523
.........
61

–7
825
–2,286
.........
90

–17
746
–2,141
.........
89

–26
708

.........

–13
1
–13
1

–64
200
65

.........

–71

.........

–20
.........
–16
.........

–67
200
59

.........

–74

.........

–27
–1
–20
.........

–69
200
55

.........

–76

.........

.........
–2
–23
.........

–73
200
51

.........

–76

–261
–222
438
–316
–7,976 –14,729 –11,573 –13,499

–1,121
.........
–5

–5
893

–7,477 –12,863 –10,544 –11,813

50

–7
.........
–449

2014

(Deficit increases (+) or decreases (–) in millions of dollars)

.........

.........
–3
–27
.........

–76
200
46

.........

–78

195
–9,658

–2,046
.........
88

–36
696

–8,555

.........

–8
.........
–290

2018

.........

.........
–4
–30
.........

–80
200
40

.........

–80

219
–982

–1,987
.........
88

–46
710

34

.........

–8
.........
–323

2019

.........

.........
–5
–34
.........

–83
200
37

.........

–80

–137
–1,072

–1,966
.........
88

–56
736

263

.........

–8
.........
–292

2020

Table S–9. MANDATORY AND RECEIPT PROPOSALS FROM
THE FEBRUARY BUDGET—Continued

250

–35
.........
–1,689

2012–
2016

250

–74
.........
–3,123

2012–
2021

–283
7,220
–5,930 –16,071
–44
–44
199
641

–52
3,592

.........

.........
–5
–37
.........

–87
200
32

.........

–81

.........

–41
6
–65
–178

–320
1,000
327

.........

–353

.........

–41
–13
–216
–178

–719
2,000
533

.........

–748

–330
–187
–556
–1,698 –25,711 –52,620

–2,001
.........
89

–67
778

–167 –23,289 –43,527

.........

–8
.........
–304

2021

Totals

SUMMARY TABLES

45

5
129

.........
.........

2,271

Other Independent Agencies:
Provide financial relief to the U.S. Postal
Service�����������������������������������������������������������

Enact Wireless Innovation and Infrastructure
Initiative (WI3):
Enact incentive auction authority and other
spectrum reforms���������������������������������������
Build a Public Safety Broadband Network��
Reserve the D Block for public safety use����

Multi-Agency:

Total, other independent agencies����������������

Subtotal, Federal Communications
Commission (FCC)������������������������������

Federal Communications Commission (FCC):
Enact spectrum license user fee��������������������
Provide no new funding for the
Telecommunications Development Fund�

13
20

.........
.........

.........
.........
.........

–1,900
1,400
3,150

–207
72

–7

–3
–53
2,218

–200

–50

279

5
86

.........
.........

.........
–49

.........
.........

Social Security Administration:
Require workers’ compensation information
reporting4�������������������������������������������������������
Temporarily extend SSI benefits for refugees�
Require States and localities to provide
pension information4�������������������������������������
Revert to quarterly wage reporting4����������������
Enact DI Work Incentives Simplification Pilot
(non-PAYGO)�������������������������������������������������
Total, Social Security Administration�����������

–49

.........

.........
–62

2012

.........

.........

Corps of Engineers:
Reform inland waterways funding2������������������

Environmental Protection Agency:
Enact pesticide registration and
premanufacture notice fees��������������������������
Establish fees for use of hazardous waste
electronic manifest system���������������������������
Total, Environmental Protection Agency������

.........
.........

Allow occupancy by a dependent child
to satisfy VA home loans occupancy
requirement���������������������������������������������������
Total, Veterans Affairs�����������������������������������

2011

–6,020
1,400
.........

–307
–58

–7

–300

249

10
157

20
30

5
92

.........
–81

–81

–196

1
–107

2013

–8,240
1,400
.........

–432
–111

–7

–425

321

15
133

18
100

.........
.........

–6
–94

–88

–163

1
–23

2014

–6,430
1,400
.........

–557
–258

–7

–550

299

22
–180

–202
.........

.........
.........

–4
–99

–95

–135

1
–35

2015

–2,460
1,400
.........

–557
–277

–7

–550

280

25
–414

–439
.........

.........
.........

–3
–100

–97

–72

1
–47

2016

–400
.........
.........

–557
–328

–7

–550

229

13
–561

–574
.........

.........
.........

–3
–104

–101

–72

1
–24

2017

(Deficit increases (+) or decreases (–) in millions of dollars)

–1,300
.........
.........

–557
–328

–7

–550

229

.........
–609

–609
.........

.........
.........

–3
–107

–104

–71

1
–29

2018

–1,050
.........
.........

–557
–328

–7

–550

229

.........
–555

–555
.........

.........
.........

–3
–110

–107

–69

1
–33

2019

.........
.........
.........

–557
–328

–7

–550

229

.........
–522

–522
.........

.........
.........

–3
–113

–110

–70

1
–38

2020

Table S–9. MANDATORY AND RECEIPT PROPOSALS FROM
THE FEBRUARY BUDGET—Continued

–2,060
–632

–35

–2,025

1,428

77
–175

–590
150

10
178

–13
–423

–410

–566

4
–274

2012–
2016

–4,845
–2,272

–70

–4,775

2,573

90
–2,901

–3,329
150

10
178

–28
–974

–946

–917

9
–439

2012–
2021

......... –25,050 –27,800
.........
7,000
7,000
.........
3,150
3,150

–557
–328

–7

–550

229

.........
–479

–479
.........

.........
.........

–3
–117

–114

–69

1
–41

2021

Totals

46
MID-SESSION REVIEW

.........
14,616
.........
14,616
18,930 14,227

Implement program integrity allocation
adjustments 2, 11����������������������������������������������
Provide $250 Economic Recovery Payments 2��
Hold harmless the Federal poverty level���������
Total, multi-agency����������������������������������������

Total, mandatory and receipt proposals,
including surface transportation�����������

–4,909

1,250
681

2014

–4,403

.........
627

2015

–521

.........
539

2016

–277

.........
123

2017

–1,266

.........
34

2018

–1,050

.........
.........

2019

.........

.........
.........

2020

.........

.........
.........

2021

–7,057

5,000
2,843

2012–
2016

–9,650

5,000
3,000

2012–
2021

5,671

–2,579 –83,764–121,100 –76,118 –71,523 –58,081 –73,693 –76,882–187,545–543,842

–4,187 –6,684 –9,465 –12,620 –14,990 –16,632 –18,305 –19,647 –20,976 –34,453–125,003
.........
.........
.........
.........
.........
.........
.........
.........
.........
265
265
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
.........
–6,970 –11,593 –13,868 –13,141 –15,267 –17,898 –19,355 –19,647 –20,976 –41,245–134,388

–2,783

1,250
587

2013

Totals

137

Total outlay effects of receipt proposals�����������

2,863

38
16
1,580
34

789
69
337

2013

9,523

66
4,465
2,793
43

437
1,372
347

2014

10,709

71
4,425
4,048
43

384
1,384
354

2015

11,976

79
4,655
5,314
40

121
1,404
363

2016

13,091

90
4,608
6,575
10

.........
1,436
372

2017

14,295

105
4,531
7,830
–20

.........
1,463
386

2018

17,146

15,861

Reform inland waterways funding������������������������
Reform coal and hardrock Abandoned Mine
Lands (AML) programs�������������������������������������
Increase Duck Stamp fees�������������������������������������
Give States and employers short-term relief from
interest and tax increases and strengthen
unemployment insurance system solvency������
Expand work-sharing program�����������������������������

.........
.........
–14
1,714
.........

.........
.........
.........
.........

2012

.........

2011

3,541
–14

–200
–14

–196

2013

–200
–14

–135

2015

–200
–14

–72

2016

–200
–14

–72

2017

–7,477 –12,863 –10,544 –11,814
–20
51
82
82

–200
–14

–163

2014

–8,555
81

–200
–14

–71

2018

34
81

–200
–14

–69

2019

263
81

–200
–14

–70

2020

142
4,775
10,324
–17

.........
1,512
410

2020

122
4,791
9,080
–20

.........
1,490
398

2019

The estimates for this proposal include effects on receipts. The receipt effects included in the totals above are listed below:

1,115

.........
.........
599
14

.........
.........
105
.........

2

502
.........
.........

32
.........
.........

2012

Continue certain expiring provisions through
calendar year 2012���������������������������������������������
Expand earned income tax credit�������������������������
Expand child and dependent care tax credit��������
Provide for automatic enrollment in IRAs and
double the tax credit for small employer plan
startup costs�������������������������������������������������������
Extend American opportunity tax credit��������������
Reform and extend Build America bonds�������������
Designate Growth Zones���������������������������������������

2011

880
37,304
59,704
113

2,233
11,681
3,387

2012–
2021

–800
–70

–566

2012–
2016

–1,800
–140

–917

2012–
2021

36,186 115,302

254
13,561
14,334
174

2,233
4,229
1,401

2012–
2016

–167 –25,629 –45,868
81
99
505

–200
–14

–69

2021

18,723

167
5,038
11,561
–14

.........
1,551
420

2021

Note: For receipt effects, positive figures indicate lower receipts. For outlay effects, positive figures indicate higher outlays. For net costs, positive figures indicate
higher deficits.
1
The estimates for this proposal include effects on outlays. The outlay effects included in the totals above are listed below:

–1,497
265
.........
4,327

5,559

.........

Total, enact Wireless Innovation and
Infrastructure Initiative (WI3)����������

2,500
409

.........
.........

2012

Extend wireless broadband through the
National Wireless Initiative and support
Universal Service Fund reform�����������������
Create a Wireless Innovation Fund��������������

2011

(Deficit increases (+) or decreases (–) in millions of dollars)

Table S–9. MANDATORY AND RECEIPT PROPOSALS FROM
THE FEBRUARY BUDGET—Continued
SUMMARY TABLES

47

.........
–64
–59
200
–276
112
1,613

.........
–17
–5
.........
.........
216
194

2012

–804
.........
2,330

–61
200

–68

–54

2013

–67
200

–74

–70

2015

–69
200

–76

588

2016

–73
200

–76

–162

2017

–76
200

–78

355

2018

–1,970 –3,721 –5,646 –7,227 –8,184
.........
.........
.........
.........
.........
–9,887 –16,893 –15,751 –19,356 –16,542

–64
200

–71

–108

2014

–8,773
.........
–8,513

–80
200

–80

388

2019

–87
200

–81

–144

2021

–320
1,000

–353

356

2012–
2016

–719
2,000

–748

835

2012–
2021

–9,274 –9,778 –12,417 –55,653
.........
.........
112
112
–9,135 –10,259 –38,588–102,393

–83
200

–80

42

2020

Totals

Expand CMS program integrity authority:
Reduce Medicaid provider tax threshold
beginning in 2015������������������������������������������
Strengthen Medicaid third-party liability�������
Track high prescribers and utilizers of
prescription drugs in Medicaid��������������������
Require manufacturers that improperly
report items for Medicaid drug coverage to
fully repay States������������������������������������������
Enforce Medicaid drug rebate agreements������
Increase penalties on drug manufacturers for
fraudulent non-compliance with Medicaid
drug rebate agreements��������������������������������
Require drugs to be properly listed with the
FDA to receive Medicaid coverage���������������
Prohibit Federal funds from being used
as Medicaid/CHIP State share unless
specifically authorized by law����������������������
Recover erroneous payments made to
insurers participating in Medicare
Advantage�����������������������������������������������������
Increase scrutiny of providers using higherrisk banking arrangements to receive
Medicare payments���������������������������������������
Allow civil monetary penalties for providers
who do not update enrollment information�
Study the feasibility of using universal
product numbers (UPNs) to improve
payment accuracy in Medicare���������������������
.........
–65
–80
–10
.........
.........
.........
.........
–490
.........
.........
.........

.........
.........
.........
.........
.........
.........
.........
.........
.........
.........

2012

.........
.........

2011

.........

.........

.........

–570

.........

.........

.........

–10
.........

–170

.........
–95

2013

.........

–10

.........

–600

.........

.........

.........

–10
.........

–310

.........
–155

2014

.........

–10

.........

–640

.........

.........

.........

–10
.........

–340

–1,460
–165

2015

.........

–10

.........

–650

.........

.........

.........

–10
.........

–370

–2,050
–170

2016

.........

–10

.........

–680

.........

.........

.........

–15
.........

–390

–2,690
–175

2017

.........

–10

.........

–680

.........

.........

.........

–15
.........

–410

–2,820
–190

2018

.........

–10

.........

–660

.........

.........

.........

–15
.........

–440

–2,970
–195

2019

.........

–10

.........

–610

.........

.........

.........

–15
.........

–460

–3,110
–200

2020

.........

–10

.........

–580

.........

.........

.........

–15
.........

–480

–3,270
–210

2021

2012–
2021

.........

–30

.........

–2,950

.........

.........

.........

–50
.........

–1,270

.........

–80

.........

–6,160

.........

.........

.........

–125
.........

–3,450

–3,510 –18,370
–650 –1,620

2012–
2016

3
The health savings to offset the cost of providing physicians two years of relief from scheduled payment cuts under the sustainable growth rate formula (SGR) are
listed below:

Enhance unemployment insurance integrity�������
Levy payments to Medicare providers with
delinquent tax debt��������������������������������������������
Levy payments to Federal contractors with
delinquent tax debt��������������������������������������������
Restructure assistance to New York City�������������
Implement program integrity allocation
adjustments��������������������������������������������������������
Provide $250 Economic Recovery Payments��������
Total receipt effects of mandatory proposals���

2011

(Deficit increases (+) or decreases (–) in millions of dollars)

Table S–9. MANDATORY AND RECEIPT PROPOSALS FROM
THE FEBRUARY BUDGET—Continued
48
MID-SESSION REVIEW

–10
.........

.........
.........
.........

.........
.........

.........
.........
.........
.........

Total, expand CMS program integrity
authority�����������������������������������������������������

Other Medicare Proposals:
Require the Secretary to determine the
geographic scope of Quality Improvement
Organization (QIO) contracts to maximize
efficiency��������������������������������������������������������
Eliminate the conflict of interest between
beneficiary protection and quality
improvement activities for QIOs������������������
Expand pool of contractors eligible for QIO
work���������������������������������������������������������������
Extend the QIO contract length from three
years up to five years������������������������������������
Align QIO contract terminations with Federal
Acquisition Regulations��������������������������������

Other Medicaid Proposals:
Limit Medicaid reimbursement of durable
medical equipment (DME) based on
Medicare rates�����������������������������������������������
Rebase Medicaid Disproportionate Share
Hospital (DSH) allotments in 2021��������������
Total, other Medicaid proposals��������������������

.........

.........

–20
–10
.........
.........
.........

.........
.........
.........
.........

.........
–210

.........
.........

.........

–210

.........

–655

.........

.........

2012

Permit exclusion of individuals affiliated with
entities sanctioned for fraudulent or other
prohibited actions from federal health care
programs��������������������������������������������������������
Create a system to validate physicians’ and
practitioners’ orders for certain high-risk
products and services������������������������������������
Require prepayment review for all power
wheelchairs���������������������������������������������������
Use a portion of Recovery Audit Contractor
recoveries to implement actions that
prevent improper payments and fraud��������
Provide flexibility to the Secretary in
implementing predictive analytics
technologies for claims payment to
maximize cost effectiveness��������������������������
Limit the discharge of debt in bankruptcy
proceedings in cases of fraudulent activity�
Strengthen penalties for illegal distribution
of Medicare, Medicaid, or CHIP beneficiary
identification or billing privileges����������������

2011

.........

.........

.........

–20

–50

.........
–420

–420

–885

.........

.........

–20

.........

–20

.........

.........

2013

.........

.........

–10

–30

–110

.........
–470

–470

–1,155

.........

–10

–20

.........

–20

–20

.........

2014

.........

–10

–20

–60

–190

.........
–550

–550

–2,805

.........

–10

–20

–20

–20

–110

.........

2015

.........

–20

–20

–80

–230

.........
–700

–700

–3,560

.........

–20

–30

–30

–20

–200

.........

2016

.........

–20

–20

–80

–260

.........
–730

–730

–4,310

.........

–20

–10

–30

–30

–250

–10

2017

(Deficit increases (+) or decreases (–) in millions of dollars)

.........

–20

–30

–90

–290

.........
–770

–770

–4,475

.........

–20

.........

–30

–30

–260

–10

2018

.........

–30

–20

–100

–320

.........
–810

–810

–4,670

.........

–20

.........

–40

–30

–280

–10

2019

.........

–30

–20

–120

–360

.........
–850

–850

–4,815

.........

–20

.........

–40

–30

–310

–10

2020

Table S–9. MANDATORY AND RECEIPT PROPOSALS FROM
THE FEBRUARY BUDGET—Continued

.........

–30

–30

–120

–390

–4,170
–5,060

–890

–5,005

.........

–30

.........

–40

–30

–330

–10

2021

.........

–150

–100

–230

–240

–1,760

–50

2012–
2021

–6,400

.........

–30

–50

–200

–600

.........

–160

–170

–710

–2,220

......... –4,170
–2,350 –10,570

–2,350

–9,060 –32,335

.........

–40

–100

–80

–90

–330

.........

2012–
2016

Totals

SUMMARY TABLES

49

17,031

–2,175
28,593

......... –1,571
......... 18,602
.........

–138
–728
–72

–69
–609
–67

.........
.........
.........

26,418

–590

–540

.........

.........

.........
–70

.........

.........
–30

2013

.........

.........
.........

2012

4,534

–2,676
7,210

–147
–827
–74

–680

.........

.........
–150

2014

–171
–1,271
–175

–850

–250

.........
–350

2016

–184
–1,394
–32

–910

–300

.........
–380

2017

–200
–1,500
138

–960

–340

.........
–430

2018

–216
–1,706
381

–1,070

–420

.........
–470

2019

–231
–1,871
12

–1,180

–460

–1,620
–2,150

2020

–251
–1,991
72

–1,250

–490

–1,610
–2,180

2021

–8,790

–2,340

–3,230
–6,490

2012–
2021

–685 –1,767
–4,435 –12,897
–512
59

–3,420

–330

.........
–880

2012–
2016

–4,759

–6,056

–6,846

–7,037

–7,275

–9,674 –14,164

37,168

–7,828

–4,759 –6,056 –6,846 –7,037 –7,275 –9,674 –14,164 –17,237 –62,233
.........
.........
.........
.........
.........
.........
......... 54,405 54,405

–160
–1,000
–124

–760

–80

.........
–280

2015

Totals

4

This proposal has both PAYGO and non-PAYGO effects.
5
This proposal has outlays of less than $500,000 per year. The total cost is $1 million from 2012–2016 and $3 million from 2012–2021.
6
This proposal was enacted in the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 (P.L. 112–9).
7
Portions of this proposal were enacted in the Department of Defense and Full-Year Continuing Appropriations Act (P.L. 112–10) and the Budget Control Act of
2011 (P.L. 112–25).
8
This proposal was enacted in the Budget Control Act of 2011 (P.L. 112–25).
9
This proposal was enacted in the Department of Defense and Full-Year Continuing Appropriations Act (P.L. 112–10).
10
The proposal to provide permanent SGR relief is presented in the adjusted baseline for the Mid-Session Review. The Administration is committed to working with
the Congress to achieve fiscally responsible SGR reform in the context of the Administration’s deficit reduction proposals.
11
The portions of the proposal that affect SSA and CMS were enacted in the Budget Control Act of 2011 (P.L. 112–25).

Additional savings after paying for SGR relief
through 2013�������������������������������������������������

Other Pharmaceutical Proposals:
Modify length of exclusivity to facilitate faster
development of generic biologics������������������
Prohibit brand and generic drug companies
from delaying the availability of new
generic drugs�������������������������������������������������
Streamline pharmacy benefit contracting in
the FEHB program���������������������������������������
Total, other pharmaceutical proposals���������
Interactions������������������������������������������������������������
Total savings from CMS program
integrity, and other Medicare,
Medicaid, and pharmaceutical
proposals������������������������������������������������������
Cost of providing SGR relief through 2013�����

Dedicate EHR penalties to improving
Medicare program financing������������������������
Total, other Medicare proposals��������������������

2011

(Deficit increases (+) or decreases (–) in millions of dollars)

Table S–9. MANDATORY AND RECEIPT PROPOSALS FROM
THE FEBRUARY BUDGET—Continued
50
MID-SESSION REVIEW

5
-*
1
15
–89
2
1
2
4
–82
1
–141
1,913

–7
304
446
553
701
57
2,054
8
–3
–1
14
–10
2
–2
3
9
–87
2
–64
2,056

–13
314
484
536
726
75
2,120

2011

8
–3
3
11
24
3
1
7
8
–98
3
–32
2,066

7
307
466
480
768
69
2,098

2012

7
–1
2
18
–22
3
1
6
5
–94
4
–71
2,122

10
323
503
467
813
77
2,193

2013

7
–1
3
15
–28
2
-*
5
5
–97
4
–85
2,239

2
417
531
432
859
83
2,324

2014

Estimate

7
–1
1
15
–22
2
-*
4
5
–101
3
–87
2,387

2
484
556
435
908
89
2,474

2015

7
–1
–1
14
–15
2
-*
5
5
–102
4
–82
2,573

5
537
605
447
960
101
2,655

2016

*$500 million or less.
1
This table meets the requirements of Section 221(b) of the Legislative Reorganization Act of 1970.
2
Estimates are based on the Budget Enforcement Act (BEA) baseline. The BEA baseline differs in some instances from current law (see the chapter on “Current
Services Estimates” in the Analytical Perspectives volume of the 2012 Budget) and also from the adjusted baseline (see Table S–7).

Total, outlays for mandatory programs under current law ������������������������������������

Other mandatory programs:
National defense ���������������������������������������������������������������������������������������������������������������
International affairs ���������������������������������������������������������������������������������������������������������
Energy �������������������������������������������������������������������������������������������������������������������������������
Agriculture ������������������������������������������������������������������������������������������������������������������������
Commerce and housing credit ������������������������������������������������������������������������������������������
Transportation ������������������������������������������������������������������������������������������������������������������
Community and regional development ����������������������������������������������������������������������������
Justice ��������������������������������������������������������������������������������������������������������������������������������
General government ���������������������������������������������������������������������������������������������������������
Undistributed offsetting receipts �������������������������������������������������������������������������������������
Other functions �����������������������������������������������������������������������������������������������������������������
Subtotal, other mandatory programs ��������������������������������������������������������������������������

Human resources programs:
Education, training, employment and social services �����������������������������������������������������
Health ��������������������������������������������������������������������������������������������������������������������������������
Medicare ����������������������������������������������������������������������������������������������������������������������������
Income security �����������������������������������������������������������������������������������������������������������������
Social Security �������������������������������������������������������������������������������������������������������������������
Veterans’ benefits and services ����������������������������������������������������������������������������������������
Subtotal, human resources programs �������������������������������������������������������������������������

2010
Actual

(In billions of dollars)

Table S–10. OUTLAYS FOR MANDATORY PROGRAMS UNDER CURRENT LAW 1,2
SUMMARY TABLES

51

684.4
400.4

688.1
371.0

684.0
359.0

686.0
361.0

2013

698.0
368.0

2014

711.0
375.0

2015

725.0
382.0

2016

741.0
390.0

2017

757.0
399.0

2018

774.0
408.0

2019

791.0
417.0

2020

808.0
426.0

2021

51.3

50.0
1.3
51.5

50.0
1.5
51.6

50.0
1.6
51.7

50.0
1.7
51.7

50.0
1.7
51.8

50.0
1.8

51.8

50.0
1.8

51.8

50.0
1.8

332.8

326.5
6.2

591.6

576.5
15.1

662.5
329.9
992.3

655.8
327.0
982.7

6,963.2
3,409.1
10,372.3

1
P.L. 112–25, the Budget Control Act of 2011 (BCA), established discretionary caps for 2012–2021. The caps included separate categories for “security” and “nonsecurity” programs for 2012 and 2013 only with security defined as the Departments of Defense, Homeland Security, and Veterans Affairs, the National Nuclear Security
Administration, the Intelligence Community Management Account, and budget function 150 for International Affairs. For purposes of this presentation, the security and
non-security categories are increased after 2013 based on the growth in the overall discretionary category but do not reflect specific policy decisions.
2
The adjustments displayed do not include disaster relief pursuant to section 251(b)(2)(D) of the BCA as OMB is in the process of developing its estimate of the 10year average calculation at the time the MSR is being printed. OMB's estimate of the maximum adjustment for 2012 will be transmitted to the Congress when OMB
submits its report in compliance with section 251(b)(2)(D)(ii) of the BCA.
3
The 2012 Budget includes placeholder estimates of $50 billion per year for Overseas Contingency Operations in 2013 and beyond. These estimates do not reflect
any specific policy decisions.
4
The 2012–2021 levels reflect the maximum cap adjustment permitted each year under the BCA for Continuing Disability Reviews (CDRs) and Redeterminations
and for Health Care Fraud and Abuse Control (HCFAC). The 2010 and 2011 levels reflect only the adjustment for CDRs and Redeterminations because the applicable
adjustment for HCFAC became the enforcement base under the BCA.
5
Totals include Overseas Contingency Operations and Other Supplemental/Emergency Funding.

5

3,618.3
1,746.3
5,364.6

51.1

50.0
1.1

Memorandum, Budget Authority Adjusted for Inflation and Population:
Security ������������������������������������������������������
913.2 873.2 810.5 715.2 706.1 697.2 689.3 682.3 675.4 669.0
Non-Security ���������������������������������������������
427.3 381.6 359.9 351.8 348.6 344.9 341.1 337.9 335.4 332.7
Grand Total ����������������������������������������������� 1,340.5 1,254.9 1,170.4 1,067.0 1,054.6 1,042.2 1,030.4 1,020.1 1,010.8 1,001.7

–1.3

9.6

127.4

126.5
0.9

5,681.8 11,851.6

159.9

159.4
0.5

163.1

162.6
0.5

7,375.0
3,885.0

20122021

5,349.0 11,260.0

3,504.0
1,845.0

20122016

Totals

Grand Total, Discretionary Budget
Authority ������������������������������������������������� 1,257.6 1,217.7 1,170.4 1,098.1 1,117.3 1,137.5 1,158.6 1,182.7 1,207.7 1,233.8 1,259.8 1,285.8

Subtotal, Cap Adjustments ����������������������
Other 2010 and 2011 Supplemental/
Emergency Discretionary Funding (not
included above) ������������������������������������������

2

Cap Adjustments:
Overseas Contingency Operations 3 ����������
Program Integrity Adjustments 4 ��������������

Subtotal, Discretionary Category ���������� 1,084.8 1,059.1 1,043.0 1,047.0 1,066.0 1,086.0 1,107.0 1,131.0 1,156.0 1,182.0 1,208.0 1,234.0

Discretionary Categories: 1
Security Category �������������������������������������
Non-Security Category �����������������������������

2010
2011
Actual Enacted 2012

Discretionary Caps Enacted in the Budget Control Act of 2011

(Budget authority in billions of dollars)

Table S–11. FUNDING LEVELS FOR APPROPRIATED
(“DISCRETIONARY”) PROGRAMS BY CATEGORY
52
MID-SESSION REVIEW

181
–*
181
1,474

Subtotal, changes in financial assets and liabilities ���������������������

Seigniorage on coins ������������������������������������������������������������������������������

Total, other transactions affecting borrowing from the public �����

Total, requirement to borrow from the public (equals
change in debt held by the public) �������������������������������������

5
1,658

Change in other factors ������������������������������������������������������������������������������
Total, change in debt subject to statutory limitation ���������������������������

1,178

1

133

1,043

1,043

87

–*

87

.........

–1

–31

–6

126

.........

956

2012

987

2

167

818

818

171

–*

171

.........

–1

2

–3

173

.........

648

2013

803

1

178

623

623

150

–*

151

.........

–1

1

3

148

.........

473

2014

869

1

207

662

662

141

–*

142

.........

–1

–1

6

138

.........

521

2015

937

2

225

710

710

127

–*

127

.........

–1

–1

6

124

.........

583

2016

Estimate

861

2

253

606

606

105

–*

105

.........

–1

–4

4

107

.........

501

2017

843

2

280

562

562

94

–*

95

.........

–1

–4

–1

101

.........

467

2018

858

2

275

581

581

83

–*

84

.........

–1

–6

–5

96

.........

498

2019

891

2

270

619

619

79

–*

80

.........

–1

–7

–6

94

.........

540

2020

908

2

257

649

649

80

–*

81

.........

–1

*

–15

96

.........

568

2021

8

10

11

13

14

15

16

17

18

18

18

18

Total, gross Federal debt �������������������������������������������������������������������� 13,529 14,918 16,095 17,080 17,882 18,750 19,685 20,544 21,385 22,241 23,130 24,036

Gross Federal debt: 5
Debt issued by Treasury ������������������������������������������������������������������������ 13,503 14,891 16,067 17,053 17,855 18,723 19,659 20,519 21,361 22,219 23,110 24,018
Debt issued by other agencies ���������������������������������������������������������������
26
27
27
27
27
27
26
25
23
22
20
18

Debt Outstanding, End of Year:

Total, debt subject to statutory limitation 4 ��������������������������������������� 13,511 14,901 16,079 17,066 17,869 18,738 19,675 20,536 21,379 22,237 23,128 24,036

Adjustment for discount, premium, and coverage 3 �����������������������������������

Debt issued by Treasury ����������������������������������������������������������������������������� 13,503 14,891 16,067 17,053 17,855 18,723 19,659 20,519 21,361 22,219 23,110 24,018

Debt Subject to Statutory Limitation, End of Year:

1
1,390

179

144

1,474

Change in debt held by Government accounts ������������������������������������������

1,245

1,245

–71

–*

–70

.........

2

5

13

110

–200

1,316

Change in debt held by the public �������������������������������������������������������������

Changes in Debt Subject to Statutory Limitation:

1
–7

–29

Net change in other financial assets and liabilities 2 ������������������������

2

Troubled Asset Relief Program (TARP) equity purchase
accounts ���������������������������������������������������������������������������������������

Net purchases of non-Federal securities by the National Railroad
Retirement Investment Trust (NRRIT) �����������������������������������������

179

Guaranteed loan accounts ��������������������������������������������������������������

35

Direct loan accounts �����������������������������������������������������������������������

Net disbursements of credit financing accounts:

Change in Treasury operating cash balance �������������������������������������

Changes in financial assets and liabilities: 1

Other transactions affecting borrowing from the public:

1,293

Actual
2010 2011

(In billions of dollars)

FEDERAL GOVERNMENT FINANCING AND DEBT

Unified budget deficit ����������������������������������������������������������������������������������

Financing:

Table S–12.
SUMMARY TABLES

53

4,654

4,787

2012
4,954

2013
5,133

2014
5,339

2015
5,564

2016

Estimate

5,817

2017
6,097

2018
6,372

2019
6,641

2020

6,898

2021

1,125
7,894

Total, financial assets net of liabilities ����������������������������������������������

Debt held by the public net of financial assets ������������������������������

24

23
1,177

–29
1,357

–29

22

153

52

–28

1,077

110

1,507

–29

21

153

53

–25

1,225

110

1,649

–29

20

153

52

–19

1,363

110

1,776

–29

19

153

50

–13

1,486

110

1,881

–29

18

153

46

–9

1,593

110

1,976

–29

17

153

42

–10

1,694

110

2,059

–29

16

153

35

–15

1,790

110

2,139

–29

14

153

28

–21

1,884

110

2,219

–29

13

153

29

–36

1,980

110

9,194 10,130 10,769 11,242 11,762 12,345 12,845 13,312 13,810 14,350 14,918

1,069

–29

145

51

–26

904

110

* $500 million or less.
1
A decrease in the Treasury operating cash balance (which is an asset) is a means of financing a deficit and therefore has a negative sign; that is, the reduction in cash
balances reduces the amount that would otherwise be borrowed from the public. An increase in checks outstanding (which is a liability) is also a means of financing a
deficit and therefore also has a negative sign.
2
Includes checks outstanding, accrued interest payable on Treasury debt, uninvested deposit fund balances, allocations of special drawing rights, and other liability
accounts; and, as an offset, cash and monetary assets (other than the Treasury operating cash balance), other asset accounts, and profit on sale of gold.
3
Consists mainly of debt issued by the Federal Financing Bank (which is not subject to limit), debt held by the Federal Financing Bank, the unamortized discount (less
premium) on public issues of Treasury notes and bonds (other than zero-coupon bonds), and the unrealized discount on Government account series securities.
4
The statutory debt limit is $14,694 billion, as increased on August 2, 2011. Under current law, the limit is scheduled to increase to $15,194 billion on or around
September 21, 2011.
5
Treasury securities held by the public and zero-coupon bonds held by Government accounts are almost all measured at sales price plus amortized discount or less
amortized premium. Agency debt securities are almost all measured at face value. Treasury securities in the Government account series are otherwise measured at
face value less unrealized discount (if any).
6
At the end of 2010, the Federal Reserve Banks held $811.7 billion of Federal securities and the rest of the public held $8,207.2 billion. Debt held by the Federal
Reserve Banks is not estimated for future years.

23
–29

Other assets net of liabilities ����������������������������������������������������������������

77
109

TARP equity purchase accounts ��������������������������������������������������������
Government-sponsored enterprise preferred stock ������������������������������

Non-Federal securities held by NRRIT �������������������������������������������������

82
124

–32

–20

668

778

110

Guaranteed loan accounts ������������������������������������������������������������������

310

9,019 10,264 11,307 12,126 12,749 13,411 14,121 14,726 15,288 15,869 16,489 17,137

9,019 10,264 11,307 12,126 12,749 13,411 14,121 14,726 15,288 15,869 16,489 17,137

4,510

Direct loan accounts ���������������������������������������������������������������������������

Credit financing account balances:

Less financial assets net of liabilities:
Treasury operating cash balance ����������������������������������������������������������

Debt held by the public �������������������������������������������������������������������������������

Debt Held by the Public Net of Financial Assets:

Debt held by the public 6 ������������������������������������������������������������������������

Actual
2010 2011

(In billions of dollars)

FEDERAL GOVERNMENT FINANCING AND DEBT—Continued

Held by:
Debt held by Government accounts ������������������������������������������������������

Table S–12.
54
MID-SESSION REVIEW

EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C.