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CRS Fact Sheet on Effect of H.R. 2488 on Budget Surpluses

AUG. 30, 1999

CRS Fact Sheet on Effect of H.R. 2488 on Budget Surpluses

DATED AUG. 30, 1999
DOCUMENT ATTRIBUTES
  • Authors
    Morrison, Sylvia
  • Institutional Authors
    Congressional Research Service
  • Cross-Reference
    For related documents, see Doc 1999-27668 (239 original pages) or

    1999 TNT 170-53.
  • Subject Area/Tax Topics
  • Index Terms
    legislation, tax
    budget, federal, revenue estimates
    national debt
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 1999-29349 (2 original pages)
  • Tax Analysts Electronic Citation
    1999 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.
DOCUMENT ATTRIBUTES
  • Authors
    Morrison, Sylvia
  • Institutional Authors
    Congressional Research Service
  • Cross-Reference
    For related documents, see Doc 1999-27668 (239 original pages) or

    1999 TNT 170-53.
  • Subject Area/Tax Topics
  • Index Terms
    legislation, tax
    budget, federal, revenue estimates
    national debt
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 1999-29349 (2 original pages)
  • Tax Analysts Electronic Citation
    1999 TNT 174-32
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