Budget 2012 Msr

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

FISCAL YEAR 2012

OFFICE OF MANAGEMENT AND BUDGET

BUDGET.GOV

MID-SESSION REVIEWBUDGET OF THE U.S. GOVERNMENT

FISCAL YEAR 2012

OFFICE OF MANAGEMENT AND BUDGET

EXECUTIVE OFFICE OF THE PRESIDENTOFFICE OF MANAGEMENT AND BUDGET

WASHINGTON D. C. 20503

THE DIRECTOR

September 1, 2011

The Honorable John A. BoehnerSpeaker of the House of RepresentativesWashington, 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

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TABLE OF CONTENTS

List of Tables �� iii

Summary ��1

Economic Assumptions ��7

Receipts ��15

Expenditures ��19

Summary Tables ��23

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iii

LIST OF TABLES

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

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1

SUMMARY

This Mid-Session Review (MSR) updates the Administration’s estimates for outlays, re-ceipts, 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 high-er-than-expected receipts and lower-than-expected 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 project-ed to be lower than previously projected, with a total reduction of $1�45 trillion over the 10-year 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 defi-cits by establishing caps on annually appro-priated (“discretionary”) spending each year from 2012 through 2021� It also established a process for achieving further deficit reduc-tion with the creation of a bipartisan, bicam-eral congressional committee (the Joint Select Committee on Deficit Reduction) tasked with recommending spending and revenue propos-als 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 achiev-ing 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 pol-icy 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 previ-ous two years, the private sector created 1�3 million new jobs in 2010; the financial system

is no longer in crisis; credit and capital mar-kets have returned to normal levels; and the cost of stabilizing the financial and automo-bile sectors has amounted to a fraction of ini-tial estimates� On the other hand, the reces-sion was deeper than originally reported, and the headwinds the economy has encountered are stronger than anticipated� First, revised estimates showed that the recession includ-ed the worst six-month period of contraction since quarterly data has been collected, fall-ing at an average annualized rate of 7�8 per-cent in the fourth quarter of 2008 and the first quarter of 2009�

Second, 2011 has seen drags on the econo-my 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 surround-ing 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 cri-sis, 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 mid-dle-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 busi-nesses to spur growth� These measures have helped buffer the economy against recent headwinds—for example, by providing house-holds with a significant boost to their income that has helped to offset the increase in gaso-line prices� Moreover, in constructing the 2012 Budget, the President laid out a plan for sig-nificant deficit reduction even while ensuring that these efforts did not threaten the recov-ery and maintaining investments in the ele-ments critical to long-term economic growth: clean energy, innovation, education, and in-

2 MID-SESSION REVIEW

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 pay-ment 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 re-ducing the deficit to this size in relation to the economy, we no longer would be adding to the Government’s debt burden through ad-ditional 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 win-ning 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 ap-propriations for the rest of fiscal year 2011� This legislation cut discretionary spend-ing by roughly $80 billion relative to the President’s 2011 Budget request� In nomi-nal terms, these were the largest one-year cuts in history� Cuts of this magnitude en-tailed not only eliminating wasteful and du-plicative programs, but also making cuts to programs that the Administration supports and would not have made if not for the fis-cal 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-

vation, and critical health programs and did not include many extraneous, ideological provisions that many in Congress desired that would have, for example, damaged im-portant efforts to reform our financial sys-tem and improve the quality and accessibil-ity 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 re-quest, that laid out a comprehensive and bal-anced strategy to cut spending, bring down Government debt, increase confidence in our Nation’s fiscal strength, and support our economic recovery while making the invest-ments 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 spend-ing and sought to save $400 billion in security discretionary spending after a comprehensive review of our military’s role, missions, and ca-pabilities� 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 de-cade, while strengthening these programs for future generations� The framework also in-cluded a target of $360 billion in other man-datory savings by 2023� With respect to taxes, the plan called for cutting tax expenditures in order to lower tax rates while still reduc-ing 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

3SUMMARY

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 in-cluded both spending cuts and revenue mea-sures, 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 par-ty� 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 be-fore the Government exhausted its options for continuing to finance obligations under the existing debt limit�

The President signed the resulting agree-ment, 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 addition-al 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 tril-lion 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

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 re-duction 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 con-sistently said that he will refuse to let these tax cuts be extended� Allowing these tax cuts to expire as scheduled and returning the es-tate tax to its 2009 levels will increase rev-enue 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 in-terest 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 re-duction 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 wind-ing 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 sus-tainable position� The recommendations of the Joint Committee are the key to achieving this, which is why the President will recom-mend an ambitious, comprehensive, and bal-anced 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


Labor Day a package of meaningful, new ini-tiatives to promote economic growth and cre-ate jobs� These will build on the actions the President has been urging Congress to com-plete 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 long-term 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 revi-sion� As shown in Table 4, the budgetary ef-fects 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 project-ed 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 appropria-tions for 2011 than in the February Budget, as provided in the full-year continuing appro-priations enacted in April, and slower-than-

expected spending across a range of Federal programs, including defense discretionary spending, purchases of GSE preferred stock, and unemployment benefits� The lower pro-jected deficit this year means that the Federal Government’s borrowing needs should be low-er as well�

Relative to the February estimate, defi-cits are also expected to be lower in 2012 and in each subsequent year of the 10-year budget window, amounting to a total reduc-tion of $1�450 trillion over 2012 through 2021� In 2012, deficits are expected to be $145 billion lower as a result of a combi-nation 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 ac-counted for by the effect of enacted legis-lation and policy changes ($1�490 trillion)� The revised Mid-Session Review economic forecast, discussed in detail in the next sec-tion, 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 defi-cit 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-esti-mate would produce a $220 billion increase in the deficit over the next decade�

Federal Government debt held by the pub-lic can be viewed as the sum of all prior defi-cits 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 esti-mate of 63�0 percent of GDP�

5SUMMARY

For 2012, debt held by the public is pro-jected 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-to-GDP 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 per-cent of GDP in 2021�

Enacted Legislation

Full-year appropriations� The full-year appropriations act, enacted on April 15, ex-tended 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 pro-gram 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 re-duce budget deficits over the next 10 years� Incorporating the caps on discretionary bud-get authority enacted in the Act in the Mid-Session 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 ini-tiatives and higher education financial as-sistance bring the reduction in spending to a total of $753 billion� This total does not include the effects of future deficit reduc-tion recommended by the Joint Committee, as discussed below�

Other enacted legislation and debt ser-vice. Other enacted legislation, including the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011, has a minimal ef-fect 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 tech-nical 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 projec-tion 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 im-provement, with lower current-year spending accounting for the remainder� The reduction in spending is split roughly evenly between discretionary programs (largely slower-than-anticipated 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 eco-nomic projection and technical re-estimates increase the deficit by $40 billion� Receipts are reduced by $46 billion, as lower tax collec-tions due to revisions in the economic forecast, chiefly lower near-term GDP growth and lower projected wage and salary income, are par-tially offset by increases due to technical fac-tors, 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 out-lay 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 pro-posals for reducing the deficit, with a tar-get of $1�5 trillion in deficit reduction� The Administration will be recommending a bal-anced array of options for reducing the deficit that encompasses the entire budget includ-ing spending and revenue measures� In light of the ongoing Joint Committee process, the Mid-Session Review includes a deficit reduc-


tion allowance of $1�5 trillion over 10 years� The February Budget included specific man-datory 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 propos-als detailed in the February Budget, and is not meant to prejudge any specific spend-ing or receipt proposals to be recommended

by the Administration and considered by the Committee� The Administration will release its recommendations for proposals to be con-sidered 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, in-cluding debt service�

Table 1. CHANGES IN DEFICITS FROM THE FEBRUARY BUDGET(In billions of dollars)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012-2016

2012-2021

February Budget deficit �� 1,645 1,101 768 645 607 649 627 619 681 735 774Percent 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 �� –* –32 –51 –72 –75 –79 –82 –87 –89 –95 –90 –309 –7532011 full-year appropriations �� –51 –21 –6 –3 –2 –2 –2 –2 –3 –4 –4 –35 –49Other legislation �� 1 –1 1 1 1 * * * * * * 2 3Debt service �� –* –* –2 –6 –11 –16 –21 –26 –31 –36 –42 –35 –190

Subtotal, enacted legislation �� –50 –54 –58 –80 –88 –97 –105 –115 –123 –135 –135 –376 –989

Economic and technical re-estimates:Receipts �� –141 –65 –7 11 22 20 17 17 14 10 7 –19 46Discretionary programs �� –58 13 22 9 –1 –5 –6 –8 –6 –6 –6 37 6

Mandatory:Refundable tax credits �� 8 6 7 10 14 16 16 15 16 16 17 53 133Unemployment compensation �� –11 –17 –14 –11 –10 –10 –10 –11 –11 –11 –12 –62 –117Social Security �� –1 9 11 12 13 13 13 12 11 10 8 59 112Medicaid �� –3 –3 –3 –6 –8 –10 –10 –12 –13 –14 –19 –29 –98Supplemental Nutrition Assistance

Program �� * 5 3 4 7 8 8 8 7 5 7 28 62Foreign Military Sales Trust Fund �� –* –1 1 1 * –1 –4 –4 –4 –4 –5 * –20Purchases of GSE preferred stock �� –25 �� Veterans benefits �� –10 3 2 2 2 2 2 2 3 3 2 11 24Civilian and military retirement �� –* 2 2 2 2 2 2 2 2 2 2 10 21Medicare �� –4 –8 –6 –5 –4 –3 2 3 4 4 8 –25 –4Other �� –24 10 7 2 3 1 * –* –* –2 * 23 21

Total mandatory �� –70 6 11 12 18 19 19 17 14 8 9 67 134Net interest1 �� 10 –5 –23 –29 –13 –11 –8 –9 –12 –13 –16 –81 –140Allowances for costs of future emergencies �� –2 –3 –1 –* –* –* –* �� –6 –6

Subtotal, economic and technical re-estimates � –261 –54 2 3 25 22 21 16 11 –1 –6 –1 40Change due to moving the February Budget

proposals to the deficit reduction allowance2 �� –19 –37 –63 –95 –23 8 –43 –53 –71 –60 –64 –211 –501Total, changes �� –329 –145 –120 –171 –86 –66 –126 –152 –183 –195 –205 –588 –1,450Mid-Session Review deficit �� 1,316 956 648 473 521 583 501 467 498 540 568

Percent of GDP �� 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�

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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 be-gan in 2009 would continue and that unemploy-ment would fall gradually from its elevated lev-els� As the economy recovered, the 2012 Budget forecast inflation to remain moderate, and inter-est rates to rise gradually� In general terms, the forecast for the MSR maintains these assump-tions 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 substan-tial amount of economic turbulence over the past two months, the MSR includes an alterna-tive economic forecast that incorporates the lat-est data through the end of August along with a presentation of its associated budgetary effects�

Real GDP has risen for eight straight quar-ters since economic growth resumed in mid-2009� Revisions to GDP growth published in late July, after the MSR forecast was com-pleted, showed growth slowing sharply in the first half of 2011� The unemployment rate has declined from its peak above 10 per-cent 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 gradu-ally� 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 auto-matic fiscal stabilizers such as the unemploy-ment 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 fall-ing 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 recov-ery� 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 fur-ther, unanticipated challenges�

For example, the steep decline in the hous-ing market ended in 2009, but the housing sector has struggled to recover from the re-cession� 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 homeown-ers with their mortgages, either by helping negotiate new terms for their loans or by reducing outstanding balances, but the re-maining 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 pa-per, 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 fami-lies 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 fis-cal consolidation at the State and local govern-ment level� Driven by balanced budget require-ments and decreased tax revenue, this fiscal


tightening has reduced aggregate demand and slowed growth nationally� Over the last 12 months, employment in State and local gov-ernment has declined by 340,000 jobs�

Third, globally, a combination of events has weighed on economic growth� Political uncer-tainty in the Middle East caused world oil markets to tighten, especially for the high-quality crude oil that is most useful in refin-ing gasoline� The price of oil rose by 16 per-cent 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� econ-omy 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 pro-duction of parts needed for Japanese automo-biles 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 quar-ter, with most of the decline occurring at the American facilities of Japanese automakers�

Moreover, the sovereign debt crisis that be-gan in 2010 in Europe has intensified in re-cent weeks, causing a selloff in global equity markets that threatens to place a new drag on consumer confidence and the global recov-ery� Last year, several European countries en-countered difficulty in obtaining credit, and fi-nancial 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 defi-cits� Even with these actions, however, the European recovery remains at risk because of increased uncertainty and because the mea-sures taken to address the fiscal crisis have had the effect in some cases of limiting de-mand 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�

Although the effects of these events are ex-pected to be temporary in most cases and the Administration remains confident about me-dium-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 re-leased 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 pub-lic 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 fore-cast in Table 4 below that reflects the latest economic data and outlook� While the effects of the economic turbulence are great on indi-viduals, 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 high-er 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 uti-lization� The normal limits to growth are not binding when there is so much unused capacity available� With rapid growth pro-jected in 2013-2017, the unemployment rate is projected to decline and real GDP is pro-jected 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 slow-down 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 econom-ic 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-

9ECONOMIC 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 pres-ents 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 histori-cal data, but do not reflect how the outlook might have changed as a result of the revi-sions or other more recent data�

The alternative forecast, shown in Table 4, is an update of the projection based on infor-mation 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 eco-nomic 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 av-erage 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 tem-porarily 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 his-torically between changes in real GDP and unemployment�

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

Actual Projections

2009 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 24,830Constant (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 18,600Price 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 �� 0�6 4�2 4�6 4�8 5�7 5�8 5�6 5�4 4�8 4�4 4�4 4�3 4�3Constant (2005) dollars �� 0�2 2�8 2�8 3�2 4�0 4�0 3�8 3�6 3�0 2�5 2�5 2�5 2�5Price index (2005 = 100) �� 0�5 1�3 1�8 1�6 1�6 1�7 1�7 1�8 1�8 1�8 1�8 1�8 1�8

Percent change, year over year:Current dollars �� –1�7 3�8 4�2 4�8 5�4 5�7 5�7 5�5 5�1 4�5 4�4 4�3 4�3Constant (2005) dollars �� –2�6 2�9 2�6 3�3 3�7 4�0 3�9 3�7 3�2 2�7 2�5 2�5 2�5Price index (2005 = 100) �� 0�9 1�0 1�6 1�5 1�7 1�6 1�7 1�7 1�8 1�8 1�8 1�8 1�8

Incomes, billions of current dollars:


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

Actual Projections

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Domestic corporate profits �� 906 1,241 1,322 1,505 1,575 1,622 1,681 1,723 1,759 1,700 1,647 1,627 1,632Employee compensation �� 7,812 7,985 8,264 8,625 9,112 9,669 10,270 10,902 11,528 12,127 12,731 13,338 13,935Wages and salaries �� 6,274 6,399 6,624 6,931 7,352 7,804 8,296 8,817 9,348 9,847 10,353 10,848 11,327Other taxable income2 �� 3,206 3,264 3,427 3,563 3,753 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) �� 214�5 218�1 224�3 228�4 232�8 237�4 242�2 247�2 252�5 257�7 263�2 268�7 274�4Percent change, Q4/Q4 �� 1�4 1�2 2�8 1�9 1�9 2�0 2�0 2�1 2�1 2�1 2�1 2�1 2�1Percent change, year/year �� –0�3 1�6 2�8 1�8 1�9 2�0 2�0 2�1 2�1 2�1 2�1 2�1 2�1

Unemployment rate, civilian, percent:

Fourth quarter level �� 10�0 9�6 8�6 8�2 7�4 6�7 6�0 5�5 5�2 5�2 5�2 5�2 5�2Annual average �� 9�3 9�6 8�8 8�3 7�7 6�9 6�3 5�7 5�3 5�2 5�2 5�2 5�2

Federal pay raises, January, percent:

Military4 �� 3�9 3�4 1�4 1�6 NA NA NA NA NA NA NA NA NACivilian5 �� 3�9 2�0 0�0 0�0 NA NA NA NA NA NA NA NA NA

Interest rates, percent:91-day Treasury bills6 �� 0�2 0�1 0�1 0�5 1�8 3�2 3�8 4�0 4�1 4�1 4�1 4�1 4�110-year Treasury notes �� 3�3 3�2 3�4 3�8 4�3 4�7 5�0 5�2 5�3 5�3 5�3 5�3 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 24,582Constant (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 18,300Price 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 �� 0�0 4�7 4�4 4�8 5�7 5�8 5�6 5�4 4�8 4�4 4�4 4�3 4�3Constant (2005) dollars �� –0�5 3�1 2�4 3�2 4�0 4�0 3�8 3�6 3�0 2�5 2�5 2�5 2�5Price index (2005 = 100) �� 0�7 1�6 1�9 1�6 1�6 1�7 1�7 1�8 1�8 1�8 1�8 1�8 1�8

Percent change, year over year:Current dollars �� –2�5 4�2 4�1 4�8 5�4 5�7 5�7 5�5 5�1 4�5 4�4 4�3 4�3Constant (2005) dollars �� –3�5 3�0 2�1 3�3 3�7 4�0 3�9 3�7 3�2 2�7 2�5 2�5 2�5Price index (2005 = 100) �� 1�1 1�2 1�9 1�5 1�7 1�6 1�7 1�7 1�8 1�8 1�8 1�8 1�8

Incomes, billions of current dollars, revised:

Domestic corporate profits �� 1,002 1,418 1,511 1,719 1,800 1,853 1,921 1,969 2,010 1,942 1,882 1,859 1,865Employee compensation �� 7,806 7,971 8,251 8,611 9,097 9,653 10,253 10,884 11,509 12,107 12,710 13,316 13,913Wages and salaries �� 6,270 6,408 6,634 6,940 7,362 7,815 8,308 8,830 9,361 9,862 10,368 10,863 11,343Other taxable income2 �� 2,955 3,108 3,266 3,396 3,573 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 quarter1 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 de-

termined�6 Average rate, secondary market (bank discount basis)�7 June assumptions adjusted for July 29, 2011 revisions to the National Income and Product Accounts�


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 infla-tion, 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 recov-ers and unemployment declines� In the long run, the CPI inflation rate is projected to be 2�1 percent per year� The other main mea-sure 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 in-corporate 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 qual-ity” 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 unlike-ly� Similar caveats hold for the projection of long-term interest rates� The yield on the 10-year 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 av-erages 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 quar-ters, while labor compensation as a share of the economy has fallen below its long-run av-erage� 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 private-sector forecasts) although when the MSR forecast was determined in June, the differ-ence 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 even-tually to recover much of the ground lost to


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 ex-pects to make up relatively little of this lost output� This is a major difference in the fore-casts 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 per-cent per year�

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

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Nominal GDP:MSR �� 14,527 15,128 15,859 16,720 17,672 18,674 19,694 20,697 21,633 22,578 23,559 24,582Budget �� 14,651 15,240 16,032 17,006 18,043 19,052 20,037 20,986 21,910 22,866 23,860 24,896CBO �� 14,660 15,238 15,817 16,301 17,261 18,406 19,333 20,260 21,183 22,140 23,096 24,082Blue Chip �� 14,527 15,079 15,727 16,560 17,438 18,327 19,225 20,148 21,095 22,087 23,125 24,212

Percent change, fourth quarter over fourth quarter

Real GDP:MSR �� 3�1 2�4 3�2 4�0 4�0 3�8 3�6 3�0 2�5 2�5 2�5 2�5Budget �� 2�5 3�1 4�0 4�5 4�2 3�6 3�2 2�7 2�5 2�5 2�5 2�5CBO �� 2�8 2�3 2�7 2013-2016 Average: 3�6 2017-2021 Average: 2�4Blue Chip �� 3�1 1�6 2�7FOMC Central Tendency �� 2�8 2�7–2�9 3�3–3�7 3�5–4�2 Longer Run Average: 2�5–2�8

Percent change, year over yearReal GDP:

MSR �� 3�0 2�1 3�3 3�7 4�0 3�9 3�7 3�2 2�7 2�5 2�5 2�5Budget �� 2�7 2�7 3�6 4�4 4�3 3�8 3�3 2�9 2�6 2�5 2�5 2�5CBO �� 2�9 2�4 2�6 1�7 4�4 5�0 3�2 2�8 2�5 2�5 2�3 2�3Blue Chip �� 3�0 1�8 2�5 3�2 3�1 2�9 2�8 2�7 2�6 2�6 2�6 2�6

GDP price index:MSR �� 1�2 1�9 1�5 1�7 1�6 1�7 1�7 1�8 1�8 1�8 1�8 1�8Budget �� 1�0 1�3 1�5 1�6 1�7 1�7 1�8 1�8 1�8 1�8 1�8 1�8CBO �� 1�0 1�5 1�2 1�4 1�4 1�6 1�8 1�9 2�0 2�0 2�0 2�0Blue Chip �� 1�2 2�1 1�9 2�0 2�1 2�1 2�1 2�1 2�1 2�1 2�1 2�1

Consumer Price Index (CPI-U):MSR �� 1�6 2�8 1�8 1�9 2�0 2�0 2�1 2�1 2�1 2�1 2�1 2�1Budget �� 1�6 1�3 1�8 1�9 2�0 2�0 2�1 2�1 2�1 2�1 2�1 2�1CBO �� 1�6 2�9 1�5 1�3 1�3 1�8 2�1 2�3 2�3 2�3 2�3 2�3Blue Chip �� 1�6 3�0 2�2 2�3 2�4 2�4 2�4 2�4 2�4 2�4 2�4 2�4

Annual average in percent

Unemployment rate:MSR �� 9�6 8�8 8�3 7�7 6�9 6�3 5�7 5�3 5�2 5�2 5�2 5�2Budget �� 9�6 9�3 8�6 7�5 6�6 5�9 5�5 5�3 5�3 5�3 5�3 5�3CBO �� 9�6 9�4 8�4 7�6 6�8 5�9 5�3 5�3 5�2 5�2 5�2 5�2Blue Chip �� 9�6 9�0 8�7 7�5 6�8 6�3 6�0 5�8 5�6 5�6 5�6 5�6FOMC Central Tendency 1 �� 9�6 8�6–8�9 7�8–8�2 7�0–7�5 Longer Run Average:5�2–5�6

91-day Treasury bills:MSR �� 0�1 0�1 0�5 1�8 3�2 3�8 4�0 4�1 4�1 4�1 4�1 4�1Budget �� 0�1 0�2 0�9 2�6 3�7 4�0 4�1 4�1 4�1 4�1 4�1 4�1CBO �� 0�1 0�1 0�1 0�2 0�8 1�9 3�2 4�0 4�0 4�0 4�0 4�0Blue Chip �� 0�1 0�1 0�5 2�9 3�6 3�8 3�9 4�0 3�9 3�9 3�9 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


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

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Budget �� 3�2 3�0 3�6 4�2 4�6 4�9 5�2 5�3 5�3 5�3 5�3 5�3CBO �� 3�2 3�3 3�2 3�3 3�8 4�3 4�9 5�3 5�3 5�3 5�3 5�3Blue Chip �� 3�2 3�2 3�6 4�9 5�2 5�4 5�4 5�4 5�4 5�4 5�4 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 surveySources: 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 unem-ployment 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 consen-sus 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 avail-able until October� In March, the Blue Chip had expected a larger decline in the unem-ployment rate, which can be seen in Table 3 in the values shown for 2013 through 2021� The June FOMC projections also show unemploy-ment falling by more than the latest consen-

sus projections� In the long run, all of the fore-casts 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 re-turn 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 FORECASTEconomic Assumptions

(Calendar years)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Nominal GDP:

% Change, 4th/4th:MSR �� 4�7 4�4 4�8 5�7 5�8 5�6 5�4 4�8 4�4 4�4 4�3 4�3Alternative �� 4�7 3�6 4�5 5�5 5�8 6�0 5�8 5�4 4�3 4�3 4�3 4�3

% Change, Year/Year:MSR �� 4�2 4�1 4�8 5�4 5�7 5�7 5�5 5�1 4�5 4�4 4�3 4�3Alternative �� 4�2 3�7 4�1 5�3 5�6 5�9 5�9 5�6 4�7 4�3 4�3 4�3

Real GDP:

% Change, 4th/4th:MSR �� 3�1 2�4 3�2 4�0 4�0 3�8 3�6 3�0 2�5 2�5 2�5 2�5Alternative �� 3�1 1�6 2�9 3�8 4�0 4�2 4�0 3�6 2�5 2�5 2�5 2�5

% Change, Year/Year:MSR �� 3�0 2�1 3�3 3�7 4�0 3�9 3�7 3�2 2�7 2�5 2�5 2�5Alternative �� 3�0 1�7 2�6 3�5 3�9 4�1 4�1 3�7 2�9 2�5 2�5 2�5


Table 4. ALTERNATIVE ECONOMIC FORECAST—ContinuedEconomic Assumptions

(Calendar years)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Unemployment Rate:MSR �� 9�6 8�8 8�3 7�7 6�9 6�3 5�7 5�3 5�2 5�2 5�2 5�2Alternative �� 9�6 9�1 9�0 8�5 7�8 7�0 6�1 5�5 5�2 5�2 5�2 5�2

Interest Rates:

91-Day Treasury Bills:MSR �� 0�1 0�1 0�5 1�8 3�2 3�9 4�0 4�1 4�1 4�1 4�1 4�1Alternative �� 0�1 0�1 0�1 0�4 2�3 3�8 4�0 4�1 4�1 4�1 4�1 4�1

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�3Alternative �� 3�2 3�0 3�3 3�9 4�6 5�0 5�2 5�3 5�3 5�3 5�3 5�3

Budget Effects of Alternative Forecast Relative to MSR(Fiscal years; in billions of dollars)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012-2016

2012-2021

Receipt changes �� –9 –30 –55 –60 –50 –34 –14 –2 –2 –2 –2 –229 –250Outlay changes:

Unemployment �� 2 12 17 22 23 19 12 2 * * * 93 108 Net interest (rates) �� 2 –14 –43 –54 –38 –26 –23 –20 –18 –17 –16 –175 –270 All other, including debt service �� * –1 * 4 9 12 14 14 13 13 13 24 91

Total outlay changes �� 4 –2 –27 –28 –7 5 2 –4 –5 –3 –3 –58 –71Deficit increase (–) �� –13 –28 –28 –32 –43 –39 –17 2 3 1 1 –170 –180

* $500 million or less�

15

RECEIPTS

The Mid-Session Review (MSR) estimates of receipts exceed the February Budget es-timates 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 re-visions based on new tax reporting data, col-lections to date, and other information as well as to revised economic assumptions� The net increase in 2012 receipts is primarily attrib-utable to technical revisions and revisions in the estimates of expiring provisions extended in the adjusted baseline, which increase re-ceipts by $51 billion and $16 billion, respec-tively� 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 techni-cal 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 re-ceipts 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 bil-lion in 2011, have a negligible effect in 2012, and reduce receipts by $8 billion over the 10-year budget horizon� The bulk of this reduc-tion 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 pre-mium 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 three-month 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 permanent-ly continued the 2001 and 2003 tax cuts for middle-income taxpayers; permanently con-tinued estate, gift, and generation-skipping transfer taxes at 2009 parameters; and reflect-ed 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 provi-sions is due in large part to reductions in the economic forecast for wages and salaries and revisions to models of receipts, which were re-estimated 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, revi-sions to the economic forecast have the great-est effect on individual and corporation income taxes, increasing those sources of receipts by $10 billion and $7 billion, respectively� The in-crease in 2011 individual income tax receipts

1 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.


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 corpo-ration 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 fore-cast 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 insur-ance 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 in-surance 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

taxes, excise taxes, and estate and gift taxes) by a net $9 billion�

TECHNICAL CHANGES

Technical revisions in the estimates in-crease 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 indi-vidual income taxes, which are only partially offset by downward re-estimates of corpora-tion income taxes and social insurance and re-tirement 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 mod-els 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 enact-ed, 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 10-year budget window but has no effect on the deficit�

17RECEIPTS 17

Table 5. CHANGE IN RECEIPTS(In billions of dollars)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012-2016

2012-2021

February Budget estimate .......................... 2,174 2,627 3,003 3,333 3,583 3,819 4,042 4,257 4,473 4,686 4,923Changes due to enacted legislation and

administrative actions �� –1 * –1 –1 –1 –1 –1 –1 –1 –1 –1 –3 –8Changes due to economic and technical

revisions in provisions extended in the adjusted baseline �� * 16 –1 5 6 7 6 6 6 7 7 32 64

Changes due to revised economic assumptions:Individual income taxes �� 10 –13 –26 –39 –37 –34 –29 –27 –28 –26 –25 –149 –283Corporation income taxes �� 7 12 8 4 1 –2 –3 –2 –3 –7 –10 24 –1Social insurance and retirement receipts �� –1 –10 –16 –22 –23 –21 –17 –17 –17 –15 –15 –93 –173Customs duties �� 1 2 3 3 3 3 3 3 3 3 2 14 28Deposit of earnings, Federal Reserve

System �� 2 7 8 4 2 1 1 1 1 1 1 21 26Other �� –* * * * * 1 1 2 2 2 2 1 10

Total changes due to revised economic assumptions �� 19 –2 –23 –50 –54 –52 –44 –41 –42 –42 –44 –181 –394

Changes due to technical re-estimates:Individual income taxes �� 123 62 30 35 36 36 35 31 29 29 34 199 356Corporation income taxes �� –11 –6 3 –1 –8 –5 –8 –8 –7 –6 –5 –17 –51Social insurance and retirement receipts �� 9 –3 –* –2 –4 –5 –6 –8 –7 –6 –8 –13 –48Other �� 1 –3 –1 2 2 –1 * 3 6 8 9 –* 26

Total changes due to technical re-estimates �� 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 �� 1 –19 –45 –28 –97 –141 –101 –100 –88 –104 –104 –331 –828

Total change in receipts �� 141 46 –39 –40 –119 –162 –119 –117 –103 –115 –112 –315 –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�

19

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-than-expected spending in a number of programs, including veterans benefits and the purchas-es 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 ef-fect 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 spend-ing 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, en-acted on August 2, authorized increases in the debt ceiling and included a number of provi-sions that will reduce budget deficits over the next 10 years� Reflecting the caps on discre-tionary 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 fur-ther 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, en-acted 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 recom-mendations 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 propos-als, along with their associated debt service savings, into the Joint Committee allowance to assume compliance with the requirements of the BCA� Removing the February manda-tory 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, fis-cally responsible reform to Medicare physician payment rates� It affirms the Administration’s commitment to permanent reform by includ-ing 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 de-crease estimated outlays for 2011 by $120 bil-


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 chang-es 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 decreas-es in non-security related programs of $45 bil-lion from 2012 through 2021�

Refundable Tax Credits. Changes in technical assumptions increase estimated outlays for refundable tax credits by $8 bil-lion in 2011 and by $133 billion over the 10-year 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 im-pact 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 pro-jected to claim these credits�

Unemployment compensation. Changes in economic and technical assumptions de-crease 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 re-specification of the estimating equations used in the Department of Labor’s unemployment model�

Social Security. Estimating changes re-duce 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

(OASI) and Disability Insurance (DI) pro-grams 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 in-creases in outlays due to lower projected mor-tality rates for persons ages 65 and older and revised estimates of the effects of the reces-sion 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 mar-ket basket and price indices used to calculate Medicaid benefits relative to the February Budget�

Supplemental Nutrition Assistance Program (SNAP). Outlays for SNAP in-crease by $62 billion over the next 10 years due to economic and technical factors� The economic changes arise from a higher partici-pation 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 inad-vertently omitted from the February Budget also contribute to the increases�

Foreign military sales. Technical chang-es decrease spending related to the Foreign Military Sales Trust Fund by $20 billion over the next 10 years� The decrease can be attrib-uted 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, re-sulting in actual net draws of $5 billion�

21EXPENDITURES

Veterans benefits. Estimating changes reduce 2011 outlays for veterans compensa-tion and pensions and readjustment benefits by $10 billion relative to the Budget, but in-crease outlays by $24 billion over the next 10 years� Actual experience with Agent Orange payments since February resulted in the low-er outlay estimate for 2011� Part of the re-duction 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 civil-ian 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 out-lays for Medicare by $4 billion in 2011 and by $4 billion over the next 10 years, most notably

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 estimat-ed 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 in-creases for Medicare Part A and D� The re-duction in Part B spending is due to a lower estimate relative to the Budget of costs relat-ed 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 project-ed to increase from February by $10 billion in 2011, but to decrease from February by $140 billion over the subsequent 10 years� The in-crease in 2011 is due primarily to higher out-lays 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 off-set by increased debt service due to estimat-ing changes in receipts and outlays�

22 MID-SESSION REVIEW22

Table 6. CHANGE IN OUTLAYS(In billions of dollars)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012-2016

2012-2021

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 �� –* –32 –51 –72 –75 –79 –82 –87 –89 –95 –90 –309 –7532011 full-year appropriations �� –51 –21 –6 –3 –2 –2 –2 –2 –3 –4 –4 –35 –49Other legislation �� * –* * –* –* –* –1 –1 –1 –1 –1 –1 –4Debt service �� –* –* –2 –6 –11 –16 –21 –26 –31 –36 –42 –35 –190

Subtotal, enacted legislation �� –51 –53 –59 –81 –89 –97 –106 –116 –124 –136 –136 –379 –997

Changes due to reestimates:

Discretionary appropriations:Security �� –56 4 26 14 2 1 * 1 1 1 1 48 51Non-security �� –2 9 –4 –6 –3 –6 –6 –8 –7 –6 –7 –11 –45

Refundable tax credits �� 8 6 7 10 14 16 16 15 16 16 17 53 133Unemployment compensation �� –11 –17 –14 –11 –10 –10 –10 –11 –11 –11 –12 –62 –117Social Security �� –1 9 11 12 13 13 13 12 11 10 8 59 112Medicaid �� –3 –3 –3 –6 –8 –10 –10 –12 –13 –14 –19 –29 –98Supplemental Nutrition Assistance

Program �� * 5 3 4 7 8 8 8 7 5 7 28 62Foreign Military Sales Trust Fund �� –* –1 1 1 * –1 –4 –4 –4 –4 –5 * –20Purchases of GSE preferred stock �� –25 �� Veterans benefits �� –10 3 2 2 2 2 2 2 3 3 2 11 24Civilian and military retirement �� –* 2 2 2 2 2 2 2 2 2 2 10 21Medicare �� –4 –8 –6 –5 –4 –3 2 3 4 4 8 –25 –4Other programs �� –26 7 6 2 2 1 –* –* –* –2 * 18 15Net interest1 �� 10 –5 –23 –29 –13 –11 –8 –9 –12 –13 –16 –81 –140

Subtotal, reestimates �� –120 11 9 –8 4 2 4 –* –4 –11 –13 18 –6Change due to moving the February

Budget proposals to the deficit reduction allowance 2 �� –18 –17 –27 2 18 18 21 26 33 43 55 –6 171

Total change in outlays �� –189 –59 –78 –87 –67 –77 –81 –91 –95 –104 –94 –367 –832

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 reestimates2 Includes debt service�

23

SUMMARY TABLES

24 MID-SESSION REVIEW24T

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EXECUTIVE OFFICE OF THE PRESIDENTOFFICE OF MANAGEMENT AND BUDGET

WASHINGTON, D.C.

Documents

Budget 2012 Msr