CRS Fact Sheet on Effect of H.R. 2488 on Budget Surpluses
CRS Fact Sheet on Effect of H.R. 2488 on Budget Surpluses
- AuthorsMorrison, Sylvia
- Institutional AuthorsCongressional Research Service
- Cross-ReferenceFor related documents, see Doc 1999-27668 (239 original pages) or
- Subject Area/Tax Topics
- Index Termslegislation, taxbudget, federal, revenue estimatesnational debt
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 1999-29349 (2 original pages)
- Tax Analysts Electronic Citation1999 TNT 174-32
Sylvia Morrison
Specialist in Tax
Government and Finance Division
SUMMARY
[1] The budget surpluses projected for FY2000-2009 by the Congressional Budget Office (CBO) would be lessened if the Taxpayer Refund and Relief Act of 1999 (H.R. 2488) became law. First, tax cuts would reduce revenue received by the federal government, which would in itself lessen the surpluses. In addition, reduced revenues would reduce the ability of the Treasury to pay down federal debt, which could have the effect of raising interest costs. Table 1 displays CBO's projected surpluses from FY2000-2009, the Joint Committee on Taxation's estimate of revenue losses, and the reductions in the surpluses projected by CBO, if H.R. 2488 should become law. This fact sheet will be updated if legislative developments warrant.
[2] The Taxpayer Refund and Relief Act of 1999 (H.R. 2488) could reduce the budget surpluses projected for FY2000-2009 by the Congressional Budget Office (CBO). First, revenue losses would follow the tax cut. Second, higher interest costs due to smaller projected reductions in publicly-held debt would necessarily follow if the government's income were reduced by tax cuts.
[3] Table 1 displays (a) the surpluses projected by CBO, (b) the estimates made by the Joint Committee on Taxation of the revenue losses that would result if H.R. 2488 were to become law, (c) the estimated higher interest costs due to smaller reductions in publicly-held debt, and, (d) the resulting projected remainder of the surpluses expected from FY2000 through 2009.
[4] The reader should note that all of the data in this table are estimates. Therefore, the numbers given as the remaining surpluses from FY2000 to 2009 are to be regarded as possibilities that could materialize if CBO's assumptions about the U.S. economy over the next decade prove to be correct, and if H.R. 2488 becomes law.
TABLE 1. CBO AND JCT ESTIMATES AND BUDGET SURPLUSES
REMAINING AFTER H.R. 2488, FY2000-FY2009
(millions of $)
FY a) Congressional Budget b) Joint Committee on Taxation
Office Projections of Estimates of Revenue Effects of
Budget Surpluses, Tax Cuts Embodied in H.R. 2488
FY2000-FY2009
2000 $161,000 ($5,273)
2001 $193,000 ($1,079)
2002 $246,000 ($34,710)
2003 $247,000 ($53,054)
2004 $266,000 ($61,737)
2005 $286,000 ($85,464)
2006 $334,000 ($116,941)
2007 $364,000 ($140,105)
2008 $385,000 ($167,924)
2009 $413,000 ($125,560)
c) Higher Interest Costs Due to d) Estimates of Budget
Smaller Reductions in Publicly- Surpluses Remaining
Held Debt because of the Effects after Revenue Effects
of H.R. 2488 of H.R. 2488
2000 ($100) $155,627
2001 ($300) $191,621
2002 ($1,200) $210,090
2003 ($3,400) $190,546
2004 ($6,600) $197,663
2005 ($10,600) $189,936
2006 ($16,300) $200,759
2007 ($23,800) $200,095
2008 ($32,900) $184,176
2009 ($42,300) $245,140
SOURCES:
a) Congressional Budget Office (CBO). The Economic and Budget
Outlook: An Update. July 1, 1999, p. 14.
b) Joint Committee on Taxation. Estimated Budget Effects of the
Conference Agreement, Aug. 4, 1999. (JCX-61-99 R) p. 13.
c) Higher interest costs due to smaller projected reductions in
publicly-held debt because of the effects of H.R. 2488, provided to
CRS by CBO, Aug. 19, 1999.
d) Calculated by CRS.
- AuthorsMorrison, Sylvia
- Institutional AuthorsCongressional Research Service
- Cross-ReferenceFor related documents, see Doc 1999-27668 (239 original pages) or
- Subject Area/Tax Topics
- Index Termslegislation, taxbudget, federal, revenue estimatesnational debt
- Jurisdictions
- LanguageEnglish
- Tax Analysts Document NumberDoc 1999-29349 (2 original pages)
- Tax Analysts Electronic Citation1999 TNT 174-32