July 23, 2003

OMB FIGURES SHOW REVENUES — DUE TO TAX CUTS — AT EXCEPTIONALLY LOW LEVELS,
WHILE SPENDING LEVELS ARE NOT ESPECIALLY HIGH

By Isaac Shapiro and Richard Kogan

PDF of full report

View Related Analyses

If you cannot access the files through the links, right-click on the underlined text, click "Save Link As," download to your directory, and open the document in Adobe Acrobat Reader.
The data in the Office of Management and Budget's mid-session review indicate that exceptionally low tax revenues, not exceptionally high levels of spending, constitute the main factor behind the jump in the deficit.
What is Different about This Year?
The budget as a share of GDP

 

2003

Average 1962-2001

Expenditures

20.6%

20.6%

Revenues

16.3%

18.7%

Deficits

4.2%

1.9%

Columns may not add due to rounding

A separate Center analysis, Sanitizing the Grim News, examines the causes of the rising deficit in more detail.

Table 1
Federal Receipts as a Share of Gross Domestic Product,  1951-2004

 

Fiscal Year

 

 

Fiscal Year

 

1951

   16.1%

 

1978

   18.0%

1952

19.0

 

1979

18.5

1953

18.6

 

1980

18.9

1954

18.4

 

1981

19.6

1955

16.6

 

1982

19.1

1956

17.4

 

1983

17.5

1957

17.7

 

1984

17.4

1958

17.3

 

1985

17.7

1959

16.1

 

1986

17.5

1960

17.8

 

1987

18.4

1961

17.7

 

1988

18.1

1962

17.5

 

1989

18.3

1963

17.8

 

1990

18.0

1964

17.6

 

1991

17.8

1965

17.0

 

1992

17.5

1966

17.3

 

1993

17.6

1967

18.3

 

1994

18.1

1968

17.6

 

1995

18.5

1969

19.7

 

1996

18.9

1970

19.0

 

1997

19.3

1971

17.3

 

1998

19.9

1972

17.5

 

1999

20.0

1973

17.6

 

2000

20.8

1974

18.3

 

2001

19.9

1975

17.9

 

2002

17.9

1976

17.2

 

2003est.

16.3

1977

18.0

 

2004est.

16.0   

Note:  Absent the tax cuts enacted since 2001, revenues would equal an estimated 17.8 percent of the economy in 2003.
Source:  Data from 1951-2002 are from the Office of Management and Budget’s Historical Tables.  Estimates for 2003 and 2004 are from the
Mid-Session Review.


End Notes:

[1] Mid-Session Review, Office of Management and Budget, July 15, 2003, page 39.

[2] Ibid., page 3.  OMB estimates that the tax cuts adopted since 2001 increased the deficit by $177 billion.  We estimate that about $10 billion of this reflects increased interest payments and $10 billion increased refunds of tax credits; so the net reduction in revenues is an estimated $157 billion.

[3] Ibid, page 39.