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To help the Congress make those decisions, the National Defense Authorization Act of 2013 (Public Law 112-239) required CBO to estimate the 10-year costs of the Administration’s plans to operate, maintain, and modernize U.S. nuclear forces. CBO estimates that over the 2015–2024 period, the Administration’s plans for nuclear forces would cost $348 billion, an average of about $35 billion a year, and an amount that is close to CBO’s December 2013 estimate of $355 billion for the 2014–2023 period. (Both estimates are given in nominal dollars; that is, they include the effects of inflation.) Although the two estimates of total costs are similar, projected costs for nuclear programs of both the Department of Defense (DoD) and the Department of Energy (DOE) have changed. Over the next 10 years, CBO estimates, DoD’s costs would total $227 billion, which is about $6 billion (or 3 percent) more than the 10-year estimate published in 2013, and DOE’s would total $121 billion, which is about $13 billion (or 9 percent) less than CBO’s 2013 estimate.

Chairman Ryan, Congressman Van Hollen, and Members of the Committee, thank you for the opportunity to testify on the Congressional Budget Office s (CBO s) most recent analysis of the outlook for the federal budget over the long term. My statement today summarizes The 2014 Long-Term Budget Outlook, which was released yesterday. Between 2009 and 2012, the federal government recorded the largest budget deficits relative to the size of the economy since 1946, causing its debt to soar. The total amount of federal debt held by the public is now equivalent to about 74 percent of the economy s annual output, or gross domestic product (GDP) a higher percentage than at any point in U.S. history except a brief period around World War II and almost twice the percentage at the end of 2008. If current laws remained generally unchanged in the future, federal debt held by the public would decline slightly relative to GDP over the next few years, CBO projects. After that, however, growing budget deficits would push debt back to and above its current high level. Twenty-five years from now, in 2039, federal debt held by the public would exceed 100 percent of GDP, CBO projects. Moreover, debt would be on an upward path relative to the size of the economy, a trend that could not be sustained indefinitely., Testimony before the Committee on the Budget, U.S. House of Representatives.

Chairman Murray, Senator Sessions, and Members of the Committee, thank you for inviting me to testify on the Congressional Budget Office s (CBO s) most recent analysis of the outlook for the budget and the economy. My statement summarizes CBO s new economic forecast and baseline budget projections, which cover 2014 to 2024. Those estimates were released last week in the report titled The Budget and Economic Outlook: 2014 to 2024. The federal budget deficit has fallen sharply during the past few years, and it is on a path to decline further this year and next year. The Congressional Budget Office (CBO) estimates that under current law, the deficit will total $514 billion in fiscal year 2014, compared with $1.4 trillion in 2009. At that level, this year s deficit would equal 3.0 percent of the nation s economic output, or gross domestic product (GDP) close to the average percentage of GDP seen during the past 40 years.

The Director of the Congressional Budget Office's answers questions of Representative Paul Ryan explaining a general approach to estimating the budgetary effects of legislation that would authorize or require the federal government to dispose of land and associated natural resources through sale, exchange, or transfer.

The production of tight oil and shale gas will continue to grow over the next 10 years—by about 30 percent and about 60 percent, respectively, according to a recent projection by the Energy Information Administration (EIA). Another EIA estimate shows that the amount of tight oil and shale gas in the United States that could be extracted with today’s technology would satisfy domestic oil consumption at current rates for approximately 8 years and domestic gas consumption for 25. Total domestic production of oil and natural gas will continue to be higher than it would have been without shale development, reducing the prices of those energy supplies. The lower prices, in turn, will increase domestic consumption of oil and gas, domestic consumption of energy overall, and net exports of gas, while decreasing the production of oil and gas from conventional resources, net imports of oil, and the use of competing fuels. The technological innovations behind hydraulic fracturing and horizontal drilling make existing labor and capital—whether they are employed in shale development, in industries using natural gas or oil, or in industries using products derived from natural gas or oil—more productive than they otherwise would be. That heightened productivity has increased gross domestic product (GDP) and will continue to do so. The increase in GDP resulting from shale development has increased federal tax revenues, and it will continue to do so. That increase will be slightly larger than the GDP increase in percentage terms, CBO expects. Specifically, CBO estimates that federal tax revenues will be about three-quarters of 1 percent (or about $35 billion) higher in 2020 and about 1 percent higher in 2040 than they would have been without shale development. There are a number of ways that the Congress could affect shale development and thus affect the oil and gas markets, economic output, and the federal budget. This report considers options that would change export policies—easin

Between 2009 and 2012, the federal government recorded the largest budget deficits relative to the size of the economy since 1946, causing federal debt to soar. Federal debt held by the public is now about 73 percent of the economy s annual output, or gross domestic product (GDP). That percentage is higher than at any point in U.S. history except a brief period around World War II, and it is twice the percentage at the end of 2007. If current laws generally remained in place, federal debt held by the public would decline slightly relative to GDP over the next several years, CBO projects. After that, however, growing deficits would ultimately push debt back above its current high level. CBO projects that federal debt held by the public would reach 100 percent of GDP in 2038, 25 years from now, even without accounting for the harmful effects that growing debt would have on the economy (see Figure 1). Moreover, debt would be on an upward path relative to the size of the economy, a trend that could not be sustained indefinitely., Testimony

By law, the Congressional Budget Office (CBO) is required to issue a report within 10 days of the end of a session of Congress that provides estimates of the caps on discretionary budget authority in effect for each fiscal year through 2021, although legislation enacted in January provided for a later release date this year. CBO is also required to report whether, by its estimates, enacted legislation has exceeded those caps; if that occurs, a sequestration (a cancellation of budgetary resources) is required. In CBO s estimation, such a sequestration will not be required for 2013. However, the Administration s Office of Management and Budget (OMB) has sole authority to determine whether such a sequestration is required and, if so, exactly how the proportional cuts are to be made. Those determinations are based on OMB s own estimates of federal spending. The potential sequestration discussed in this report that is, one that would occur if appropriations exceeded one of the caps on discretionary funding is different from the sequestration that has been implemented in 2013 as a result of the automatic procedures to restrain discretionary and mandatory spending. Those across-the-board budget reductions remain in effect for 2013 and will also result in a lowering of the discretionary caps and a sequestration of mandatory spending in the years 2014 through 2021.

The Army is planning to develop and purchase a new Ground Combat Vehicle (GCV) that will serve the dual purposes of operating as a combat vehicle and transporting soldiers to, from, and around the battlefield. The GCV is intended to replace the current fleet of Bradley Infantry Fighting Vehicles (IFVs), which operate with the service s armored combat brigades. The Congressional Budget Office (CBO) estimates that implementing the GCV program on the most recent schedule would cost $29 billion (in 2013 dollars) over the 2014 2030 period. This report compares the Army s plan for the GCV with four other options the service could pursue instead. Although none of those alternatives would meet all of the Army s goals for the GCV program, all are likely to be less costly and less risky (in terms of unanticipated cost increases and schedule delays) than CBO anticipates will be the case under the Army s plan. Some of the options also would offer advantages relative to the GCV in meeting the Army s mission.

During recessions, federal tax liabilities and, therefore, revenues decline automatically with the reduction in output and income. In addition, some federal outlays to pay unemployment insurance benefits, for example automatically increase. Such reductions in revenues and increases in outlays known as automatic stabilizers help bolster economic activity during downturns, but they also temporarily increase the federal budget deficit. Conversely, when real (inflation-adjusted) gross domestic product (GDP) moves up closer to the maximum sustainable output of the economy (termed potential GDP), revenues automatically rise and outlays automatically fall. Under those circumstances, automatic stabilizers offer a smaller boost to economic activity and thereby slow its growth. (Those effects of automatic stabilizers are in addition to the effects of any legislative changes in tax and spending policies.) The Congressional Budget Office (CBO) uses statistical techniques to estimate the effects of the business cycle on federal revenues and outlays and, thus, on federal budget deficits. According to CBO s estimates, automatic stabilizers added significantly to the budget deficit and thereby helped to strengthen economic activity in fiscal years 2009 through 2012. Given CBO s economic and budgetary projections under current law, the agency expects that automatic stabilizers will continue to add significantly to the budget deficit and to support economic activity in 2013 and 2014 but that their effects on the budget and the economy will decline significantly from 2015 through 2018 in response to improving economic conditions.

Chairman Murray, Senator Sessions, and Members of the Committee, thank you for inviting me to testify on the Congressional Budget Office s (CBO s) most recent analysis of the outlook for the budget and the economy. My statement summarizes CBO s new economic forecast and baseline budget projections, which cover fiscal years 2013 to 2023. Those estimates were released last week in the report titled The Budget and Economic Outlook: Fiscal Years 2013 to 2023. Economic growth will remain slow this year, CBO anticipates, as gradual improvement in many of the forces that drive the economy is offset by the effects of budgetary changes that are scheduled to occur under current law. After this year, economic growth will speed up, CBO projects, causing the unemployment rate to decline and inflation and interest rates to eventually rise from their current low levels. Nevertheless, the unemployment rate is expected to remain above 7 percent through next year; if that happens, 2014 will be the sixth consecutive year with unemployment exceeding 7 percent of the labor force the longest such period in the past 70 years. If the current laws that govern federal taxes and spending do not change, the budget deficit will shrink this year to $845 billion, or 5.3 percent of gross domestic product (GDP), its smallest size since 2008. In CBO s baseline projections, deficits continue to shrink over the next few years, falling to 2.4 percent of GDP by 2015. Deficits are projected to increase later in the coming decade, however, because of the pressures of an aging population, rising health care costs, an expansion of federal subsidies for health insurance, and growing interest payments on federal debt. As a result, federal debt held by the public is projected to remain historically high relative to the size of the economy for the next decade. By 2023, if current laws remain in place, debt will equal 77 percent of GDP and be on an upward path, CBO projects (see Figure 1)., Testimony before the Committee on the Budget, United States Senate.

In February 2009, in response to significant weakness in the economy, lawmakers enacted the American Recovery and Reinvestment Act (ARRA). The legislation s numerous spending and revenue provisions can be grouped into several categories according to their focus: Providing funds to states and localities for example, by raising federal matching rates under Medicaid, providing aid for education, and increasing financial support for some transportation projects; Supporting people in need such as by extending and expanding unemployment benefits and increasing benefits under the Supplemental Nutrition Assistance Program (formerly the Food Stamp program); Purchasing goods and services for instance, by funding construction and other investment activities that could take several years to complete; and Providing temporary tax relief for individuals and businesses such as by raising exemption amounts for the alternative minimum tax, adding a new Making Work Pay tax credit, and creating enhanced deductions for depreciation of business equipment.

The federal government is confronting significant and fundamental budgetary challenges. If current policies are continued in coming years, the aging of the population and the rising cost of health care will boost federal spending, as a share of the economy, well above the amount of revenues that the federal government has collected in the past. As a result, putting the federal budget on a sustainable path will require significant changes in spending policies, tax policies, or both. The task of addressing those formidable challenges is complicated by the weakness of the economy and the large numbers of unemployed workers, empty houses, and underused factories and offices. Changes that might be made to federal spending or tax policies could have a substantial impact on the pace of economic recovery during the next few years as well as on the nation's output and people's income over the longer term., Testimony before the Joint Select Committee on Deficit Reduction, U.S. Congress.