The Budget for Fiscal Year 2008 (CRS Report for Congress)
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| Release Date |
Revised Jan. 4, 2008 |
| Report Number |
RL33915 |
| Report Type |
Report |
| Authors |
D. Andrew Austin, Government and Finance Division |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
On February 5, 2007, President Bush presented his fiscal year (FY) 2008 budget to Congress. The President's budget predicted a deficit of $239 billion for FY2008 and a steady improvement of the federal government's fiscal position, including a surplus of $61 billion in FY2012, the last year projected. Major proposals included large defense supplementals for FY2007 and FY2008, extensions of the expiring tax cuts, limited increases in domestic discretionary spending, and limited increases in defense spending after FY2008. The Administration also proposed a temporary halt to the expanding reach of the Alternative Minimum Tax (AMT) in FY2007 and FY2008. Medicare and Medicaid were expected to grow more slowly. The Administration's July 2007 Mid-Session Review showed little change in the budget outlook for FY2008 through FY2012, although higher health outlays and war costs increased the expected FY2008 deficit slightly.
The FY2008 budget also discussed long-term fiscal problems. According to the longer-term projections from the Administration, the Congressional Budget Office (CBO), and the Government Accountability Office (GAO), the impending retirement of the baby boom generation and rising health care costs will substantially expand spending over the coming decades on federal programs serving the elderly, such as Medicare, Social Security, and Medicaid. The long-term growth of outlays, if left unchanged or if not offset by new revenues, could overwhelm the government's ability to finance its obligations.
In January 2007, the CBO released baseline projections of future budget outcomes under current law. CBO projected a FY2008 deficit of $98 billion, a $170 billion surplus in FY2012, and a $249 billion surplus in FY2017. The baseline assumes the large tax cuts enacted in the first half of the decade expire as scheduled, real discretionary spending is fixed, and the Alternative Minimum Tax is unchanged.
The House and Senate adopted separate versions of the FY2008 budget resolution in March 2007, which would allow more domestic spending than the Administration request and extend some expiring tax cuts with conditions. The House and Senate adopted a conference agreement (H.Rept. 110-153) on May 17, with a projected FY2008 deficit of $252 billion. By mid-July, the House and Senate Committees on Appropriations had approved most of the 12 regular appropriations bills. At the end of FY2007, the House had passed all 12 appropriations bills and the Senate had passed four. The Senate passed three more appropriations bills in October. The President had said he would veto other appropriations bills. At the end of FY2007, Congress passed the first (H.J.Res. 52) of four continuing resolutions (H.R. 3222, H.J.Res. 69, H.J.Res. 72), which in sequence, funded government operations until the end of the calendar year. On November 8, Congress approved the Labor-HHS-Education bill (H.R. 3043, S. 1710), which the President vetoed, and Defense bill (H.R. 3222, P.L. 110-116), which he signed. On December 19, Congress passed an omnibus bill (H.R. 2764) that incorporated the 11 remaining regular appropriations bills. On December 26, the President signed the Consolidated Appropriations Act of FY2008 (P.L. 110-161), which provided $555 billion in discretionary budget authority. This report will not be updated.
