BUDGET AND ECONOMIC OUTLOOK In March and August of each Year, the Congressional Budget Office (CBO),...

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BUDGET AND ECONOMIC OUTLOOK In March and August of each Year, the Congressional Budget Office (CBO), the independent analysis arm of Congress, publishes “An Update to the Budget and Economic Outlook”. These documents look out at the following decade to determine the impact of existing tax and budget policies on the government’s fiscal health and on the economy.
	
Document Preview: CONGRESS OF THE UNITED STATES
CONGRESSIONAL BUDGET OFFICE
CBO
An Update to the 
Budget and 
Economic Outlook: 
Fiscal Years 
2012 to 2022
Deficits or Surpluses (Percentage of GDP)
4
2 Actual
Projected
0
CBO’s Baseline
Alternative
Projection
-2
Fiscal
Scenario
-4
-6
-8
-10
-12
 XXXXXXXXXX XXXXXXXXXX XXXXXXXXXX
The Unemployment Rate (Percent)
12
Actual Projected
10
8
6
4
2
0
 XXXXXXXXXX XXXXXXXXXX XXXXXXXXXX
AUGUST 2012Notes
Unless otherwise indicated, all years referred to in describing the economic outlook are 
calendar years; other years are federal fiscal years (which run from October 1 to 
September 30).
Numbers in the text and tables may not add up to totals because of rounding.
The figures in Chapter 2 use white vertical bars to indicate periods of recession. (A recession 
extends from the peak of a business cycle to its trough.)
CBO initially completed its economic forecast in early July. As such, the forecast described 
in this report does not reflect any other developments since then, including the annual 
revision to the national income and product accounts, which were released by the Commerce 
Department’s Bureau of Economic Analysis on July 27. In Chapter 2, only figures and 
discussions of recent events are consistent with the revised data. The revisions to the national 
income and product accounts are unlikely to have a major effect on CBO’s projections.
Supplemental data for this analysis are available on CBO’s Web site (www.cbo.gov).
CBO Pub. No. 4577Contents
Summary iii
The Budget Outlook 1
The Budget Deficit, Revenues, and Outlays in 2012 3
1
CBO’s Baseline Budget Projections for 2013 to 2022 8
Box 1-1: Automatic Enforcement Procedures Under the Budget Control Act 10
Budget Projections Under Alternative Scenarios 14
The Economic Outlook 25
The Economy in XXXXXXXXXX
2
The Economic Outlook for 2013 to XXXXXXXXXX
Box 2-1: Fiscal Policy Under Current Law in XXXXXXXXXX
The Economic Outlook for 2018 to 2022...

David · Accepted Answer

1. Using the tax evaluation criteria for economic efficiency and equity discussed in 
class, evaluate the effect of the expiration of the tax rate deductions, expanded 
deductions and expansion of tax credits described in the report. 
Ans:- The effect of the expiration of the tax rate deductions, expanded deductions and 
expansion of tax credits described in the report are as follows:- 
1) Expiration of tax deductions will help in increasing the cash flow from the revenue 
generated from the tax. 
2) The expanded deduction and the expansion of tax credits will indirectly affect the 
federal revenue which in turn will decrease the economic efficiency and the equity 
effect. 
3) The positive is that the increase in expanded deduction and expansion of tax credits 
encourage investment in the tax saving products which in turn will help in improving 
efficiency of the economy.

BUDGET AND ECONOMIC OUTLOOK In March and August of each Year, the Congressional Budget Office (CBO), the independent analysis arm of Congress, publishes “An Update to the Budget and Economic Outlook”....

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