Energy use—for electricity, transportation, and heating and air conditioning—is pervasive throughout the U.S. economy, representing 8.4 percent of U.S. gross domestic product in 2010. About 80 percent of the energy used by households and businesses comes from oil, natural gas, and coal; the rest comes from nuclear power and renewable sources, such as wind and the sun. Disruptions in the supply of commodities used to produce energy tend to raise energy prices, imposing an increased burden on households and businesses.
The federal government incurred a budget deficit of $721 billion in the first seven months of fiscal year 2012, CBO estimates in its latest Monthly Budget Review—$149 billion less than the shortfall reported during the same period last year. Without shifts in the timing of certain payments, however, the deficit so far this year would have been only $92 billion smaller.
On Wednesday I visited the University of Chicago, where I made a presentation on "The Challenge of Stabilizing Federal Debt" and spoke with a number of professors. My hosts included several members of CBO's Panel of Economic Advisers, and I was pleased to be able to spend time with them and with other members of the Chicago faculty.
Federal highway and mass transit programs are financed largely by a variety of transportation-related excise taxes. The largest share of the revenues comes from the federal tax on gasoline, including gasoline that is blended with ethanol. Revenues from those taxes are credited to the Highway Trust Fund, and most of the spending for those programs is attributable to that fund. Because the gasoline tax is set as a fixed amount per gallon (currently 18.4 cents), policies that are designed to reduce gasoline consumption would decrease the amounts credited to the fund.
Under current law, starting on July 1, the interest rate on new subsidized student loans will rise from the 3.4 percent in effect this year to 6.8 percent. During the past few days, CBO has released cost estimates for House and Senate bills that would delay that increase for one year.
CBO’s estimates for the proposed legislation can be found here:
Yesterday Frank Sammartino, CBO’s Assistant Director for Tax Analysis, testified before the Senate Finance Committee on federal support for state and local governments provided through the tax code and on some ways in which tax reform might affect that support.
The testimony focused on two particular aspects of current policy:
Today CBO released the second part of its analysis of the President’s 2013 budget—the proposals’ potential effects on the economy and, in turn, the impact of those economic effects on the budget. Last month, CBO released the first part of its analysis—the proposals’ budgetary impact without considering their effects on the economy.
In fiscal year 2011, federal expenditures for the Supplemental Nutrition Assistance Program (SNAP, formerly known as Food Stamps)—$78 billion—and participation in the program were the highest they have ever been. In an average month that year, about one in seven U.S. residents received SNAP benefits.
How much did the federal government collect in individual income taxes in fiscal year 2011? How much did it spend on health care programs or on defense? To provide ready answers to those questions, CBO has prepared three infographics examining the following components of the federal budget:
The federal government incurred a budget deficit of almost $780 billion in the first half of fiscal year 2012, CBO estimates in its latest—Monthly Budget Review—$53 billion less than the shortfall during the same period last year.
