MID-SESSION REVIEW 

BUDGET OF THE U.S. GOVERNMENT

FISCAL YEAR 2012

OFFICE OF MANAGEMENT AND BUDGET

BUDGET.GOV

MID-SESSION REVIEW

BUDGET OF THE U.S. GOVERNMENT

FISCAL YEAR 2012

OFFICE OF MANAGEMENT AND BUDGET

EXECUTIVE OFFICE OF THE PRESIDENT

OFFICE OF MANAGEMENT AND BUDGET

WASHINGTON D. C. 20503

THE DIRECTOR

September 1, 2011

The Honorable John A. Boehner

Speaker of the House of Representatives

Washington, DC 20510

Dear Mr. Speaker:

 Section 1106 of Title 31, United States Code, requests that the President send to the Congress 

a supplemental update of the Budget that was transmitted to the Congress earlier in the year. 

This supplemental update of the Budget, commonly known as the Mid-Session Review, contains 

revised estimates of receipts, outlays, budget authority, and the budget deficit for fiscal years 

2011 through 2021. 

Sincerely,

Jacob J. Lew

Director

Enclosure

Identical Letter Sent to the President of the Senate

i

TABLE OF CONTENTS

List of Tables ��������������������������������������������������������������������������������������������������������������������������������������������� iii

Summary �����������������������������������������������������������������������������������������������������������������������������������������������������1

Economic Assumptions �������������������������������������������������������������������������������������������������������������������������������7

Receipts �����������������������������������������������������������������������������������������������������������������������������������������������������15

Expenditures ���������������������������������������������������������������������������������������������������������������������������������������������19

Summary Tables ���������������������������������������������������������������������������������������������������������������������������������������23

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iii

LIST OF TABLES

Table 1. Changes in Deficits from the February Budget �����������������������������������������������������������������6

Table 2. Economic Assumptions �������������������������������������������������������������������������������������������������������9

Table 3. Comparison of Economic Assumptions ����������������������������������������������������������������������������12

Table 4. Alternative Economic Forecast �����������������������������������������������������������������������������������������13

Table 5. Change in Receipts ������������������������������������������������������������������������������������������������������������17

Table 6. Change in Outlays �������������������������������������������������������������������������������������������������������������22

Table S–1. Budget Totals ���������������������������������������������������������������������������������������������������������������������24

Table S–2. Effect of Budget Proposals on Projected Deficits �������������������������������������������������������������25

Table S–3. Adjusted Baseline by Category �����������������������������������������������������������������������������������������26

Table S–4. Proposed Budget by Category �������������������������������������������������������������������������������������������28

Table S–5. Proposed Budget by Category as a Percent of GDP ��������������������������������������������������������30

Table S–6. Proposed Budget in Population- and Inflation-Adjusted Dollars �����������������������������������32

Table S–7. Bridge from Budget Enforcement Act Baseline to Adjusted Baseline ����������������������������34

Table S–8. Change in the Adjusted Baseline from Budget to MSR ��������������������������������������������������35

Table S–9. Mandatory and Receipt Proposals from the February Budget ���������������������������������������37

Table S–10. Outlays for Mandatory Programs under Current Law ���������������������������������������������������51

Table S–11. Funding Levels for Appropriated (“Discretionary”) Programs by Category ������������������52

Table S–12. Federal Government Financing and Debt ������������������������������������������������������������������������53

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1

SUMMARY

This Mid-Session Review (MSR) updates 

the Administration’s estimates for outlays, receipts, and the deficit for economic, legislative, 

and other changes that have occurred since 

the President’s 2012 Budget was released in 

February. The 2011 deficit is now projected to 

be $1.316 trillion, $329 billion or 20 percent 

lower than the $1.645 trillion deficit projected 

in February, due to a combination of higher-than-expected receipts and lower-thanexpected outlays. As a percentage of gross 

domestic product (GDP), the deficit is now 

projected to equal 8.8 percent, down from 10.9 

percent projected in February. The deficits for 

each of the following 10 years are also projected to be lower than previously projected, with 

a total reduction of $1.45 trillion over the 10-

year period. This reduction results primarily 

from the terms of the Budget Control Act of 

2011, which the President signed on August 

2. The Budget Control Act lowers future deficits by establishing caps on annually appropriated (“discretionary”) spending each year 

from 2012 through 2021. It also established 

a process for achieving further deficit reduction with the creation of a bipartisan, bicameral congressional committee (the Joint Select 

Committee on Deficit Reduction) tasked with 

recommending spending and revenue proposals that yield $1.5 trillion in deficit reduction 

over the 10-year period, about $500 billion in 

deficit reduction beyond the proposals laid out 

in the President’s Budget.

As described more fully below, the work 

of the Joint Committee is critical to achieving fiscal sustainability. What is more, the 

Committee’s already difficult task will be 

made even more challenging by the fact that 

its recommendations will need to take into 

consideration the current economic climate.

On the one hand, due to extraordinary policy efforts, the economy already has made 

substantial progress recovering ground lost 

during the financial crisis and subsequent 

18-month recession. Between the middle of 

2009 and the end of 2010, the economy grew 

for six consecutive quarters, with real GDP 

rising at an average annual rate of 3 percent; 

after shedding 8.8 million jobs over the previous two years, the private sector created 1.3 

million new jobs in 2010; the financial system 

is no longer in crisis; credit and capital markets have returned to normal levels; and the 

cost of stabilizing the financial and automobile sectors has amounted to a fraction of initial estimates. On the other hand, the recession was deeper than originally reported, and 

the headwinds the economy has encountered 

are stronger than anticipated. First, revised 

estimates showed that the recession included the worst six-month period of contraction 

since quarterly data has been collected, falling at an average annualized rate of 7.8 percent in the fourth quarter of 2008 and the first 

quarter of 2009.

Second, 2011 has seen drags on the economy in the form of a sharp rise in oil prices, the 

disruption to global supply chains as a result 

of the earthquake in Japan, a slowdown of 

growth in Europe, a sluggish rebound in the 

housing market, and uncertainty surrounding congressional action on the debt ceiling, 

all of which have delayed the recovery further.

In sum, economic growth and job creation, 

while positive, have not been strong enough 

to bring down the unemployment rate to an 

acceptable level.

That is why, in addition to the actions that 

were taken at the depth of the financial crisis, the Administration has taken significant 

steps to strengthen the recovery. On December 

17, 2010, the President signed into the law 

the bipartisan Tax Relief, Unemployment 

Insurance Reauthorization, and Job Creation 

Act, which prevented a tax increase on middle-class Americans, cut payroll taxes for 159 

million workers, extended unemployment 

benefits for 7 million unemployed Americans, 

and provided a series of tax incentives to businesses to spur growth. These measures have 

helped buffer the economy against recent 

headwinds—for example, by providing households with a significant boost to their income 

that has helped to offset the increase in gasoline prices. Moreover, in constructing the 2012 

Budget, the President laid out a plan for significant deficit reduction even while ensuring 

that these efforts did not threaten the recovery and maintaining investments in the elements critical to long-term economic growth: 

clean energy, innovation, education, and in-
2 MID-SESSION REVIEW

frastructure. In the long run, only by living 

within our means will we be able to make the 

investments necessary to win the future in a 

competitive global economy.

THE 2012 BUDGET AND 

SUBSEQUENT DEVELOPMENTS

Accordingly, in February, the President’s 

2012 Budget provided a significant down payment on the deficit reduction that we need to 

take, including proposing $1 trillion in deficit 

reduction over the next 10 years on top of the 

$2 trillion in projected savings from winding 

down operations in Afghanistan and Iraq and 

the expiration of the high-income tax cuts 

passed in 2001 and 2003. That Budget would 

have reduced the deficit to 3 percent of GDP 

by the middle of the decade and sustained 

that level for many years thereafter. By reducing the deficit to this size in relation to 

the economy, we no longer would be adding 

to the Government’s debt burden through additional Federal spending, but would instead 

be achieving what economists call “primary 

balance.” At the same time, the 2012 Budget 

included investments in areas critical to winning the future: education, innovation, clean 

energy, and infrastructure.

Since the 2012 Budget was released, there 

have been three significant developments 

that affect both the budget itself and fiscal 

policy generally. First, on April 15, 2011, the 

President signed into law the Department 

of Defense and Full-Year Continuing 

Appropriations Act, 2011, to provide for appropriations for the rest of fiscal year 2011.

This legislation cut discretionary spending by roughly $80 billion relative to the 

President’s 2011 Budget request. In nominal terms, these were the largest one-year 

cuts in history. Cuts of this magnitude entailed not only eliminating wasteful and duplicative programs, but also making cuts to 

programs that the Administration supports 

and would not have made if not for the fiscal situation. For instance, the new funding 

levels set in this agreement mean delaying 

the goal of doubling funding for key research 

and development (R&D) agencies along 

with ambitious goals set for the Nation in 

the President’s Budget in the areas of global 

health and international development. At

the same time, this legislation allowed for 

continued investments in education, innovation, and critical health programs and did 

not include many extraneous, ideological 

provisions that many in Congress desired 

that would have, for example, damaged important efforts to reform our financial system and improve the quality and accessibility of affordable health care.

Second, after the 2011 appropriations 

were finally completed, the President looked 

again to the future and presented a revised 

fiscal framework, building on the Budget request, that laid out a comprehensive and balanced strategy to cut spending, bring down 

Government debt, increase confidence in 

our Nation’s fiscal strength, and support our 

economic recovery while making the investments we need to win the future. Altogether, 

the plan would have reduced the deficit by $4 

trillion over 12 years. The framework would 

have saved approximately $770 billion over 

12 years in non-security discretionary spending and sought to save $400 billion in security 

discretionary spending after a comprehensive 

review of our military’s role, missions, and capabilities. In health care—a key driver of our 

long-term deficits—the framework identified 

changes to Medicare and Medicaid that would 

build on the efficiencies in the Affordable 

Care Act (ACA), saving $340 billion by 2021 

and at least $1 trillion in the subsequent decade, while strengthening these programs for 

future generations. The framework also included a target of $360 billion in other mandatory savings by 2023. With respect to taxes, 

the plan called for cutting tax expenditures 

in order to lower tax rates while still reducing the deficit. The framework also reiterated 

the President’s position that the 2001 and 

2003 tax cuts for those in the top 2 percent of 

earners should expire. Finally, the President 

called for a “debt failsafe” trigger to ensure a 

decline in Government debt as a share of the 

economy. Specifically, the President proposed 

a trigger that would require, by the second 

half of the decade, our Nation’s debt to be on 

a declining path as a share of our economy. If 

that target were not met by 2014, there would 

be automatic spending cuts (both in direct 

spending and spending through the tax code) 

as insurance against inaction.

The President’s fiscal framework set the 

stage for the third significant development 

that has occurred since the release of the 2012 

Budget, negotiations this summer between 
SUMMARY 3

the Administration and Congress on deficit 

reduction and raising the statutory debt limit.

Considering that both parties had agreed on 

the size of the deficit reduction necessary—$4 

trillion over the next decade—there was hope 

that a balanced package of that size, which included both spending cuts and revenue measures, could be agreed to. In pursuit of this 

goal, the President called for an agreement on 

a bold plan that would have included many 

significant compromises for him and his party. Unfortunately, congressional Republicans 

would not agree to a package that included 

revenue increases. Agreement on a smaller 

package limited to spending cuts was finally 

reached over the last weekend in July, just before the Government exhausted its options for 

continuing to finance obligations under the 

existing debt limit. 

The President signed the resulting agreement, the Budget Control Act of 2011, into law 

on August 2. According to the Congressional 

Budget Office, the provisions of the Act would 

reduce the deficit by at least $2.1 trillion over 

the next decade. The first step toward this 

goal consists of approximately $900 billion 

in deficit reduction achieved through tight 

caps on discretionary spending. These caps 

will bring discretionary spending to its lowest 

level as a share of the economy since Dwight 

D. Eisenhower was President. The caps were 

designed to ensure that spending cuts were 

balanced between security and non-security 

programs by setting specific targets for each 

category during the first two years. Assuming 

that the reductions continue to be shared 

across security and non-security programs 

over the remainder of the 10-year period, the 

caps would generate $420 billion savings on 

security programs, an amount that includes a 

projected $350 billion in defense savings.

The second step toward the $2.1 trillion in 

deficit reduction is the establishment of the 

bipartisan, bicameral Joint Select Committee 

charged with finding $1.5 trillion in additional deficit reduction by the end of November 

2011. Under the Act, if the Joint Committee 

is unsuccessful or if Congress fails to pass 

the Joint Committee’s plan, then a sequester 

would be triggered that would cut $1.2 trillion in spending over 10 years, split evenly 

between defense and non-defense programs.

This trigger is modeled on those devised for 

the Gramm-Rudman-Hollings legislation in 

the 1980s—legislation that created automatic 

consequences based on congressional action 

or inaction that led to a period of significant 

deficit reduction. In addition to the deficit reduction included in the Budget Control Act, 

further deficit reduction can be achieved if 

the 2001 and 2003 tax cuts for the wealthiest 

Americans are allowed to expire at the end of 

calendar year 2012. The President has consistently said that he will refuse to let these 

tax cuts be extended. Allowing these tax cuts 

to expire as scheduled and returning the estate tax to its 2009 levels will increase revenue by $866 billion over the next 10 years.

Moreover, by reducing the amount that the 

Government needs to borrow, this additional 

revenue will lead to $160 billion in lower interest costs, bringing total deficit reduction 

from this change in the tax code to more than 

$1 trillion over the next 10 years. 

Depending on whether the Joint Committee 

succeeds or the fallback spending trigger is 

activated, the Budget Control Act of 2011 will 

reduce deficits by $2.1 to $2.4 trillion over 

the coming 10 years. Allowing the 2001 and 

2003 tax cuts for the wealthiest Americans to 

expire further increases the total deficit reduction to $3.1 to $3.4 trillion, equivalent to 

about 1.5 percent of 10-year GDP.

As shown in this Mid-Session Review, the 

deficit reduction from the new discretionary 

caps, the pending recommendations of the 

Joint Committee, and the expiration of the 

upper-income tax cuts, combined with winding down operations in Afghanistan and Iraq, 

will bring deficits down to approximately 2.2 

percent of GDP toward the end of the 10-year 

budget window. These policy changes would 

be sufficient to put the debt on a declining 

path as a share of the economy and would 

therefore place the budget in a fiscally sustainable position. The recommendations of 

the Joint Committee are the key to achieving 

this, which is why the President will recommend an ambitious, comprehensive, and balanced deficit reduction plan to Congress in 

September that would place the country on 

firm fiscal footing by the middle of this decade.

At the same time, Congress must appreciate 

that the economy is still wrestling with the 

after-effects of a very severe recession. Thus,

in addition to focusing on long-term deficit 

reduction, the President will introduce after 
4 MID-SESSION REVIEW

Labor Day a package of meaningful, new initiatives to promote economic growth and create jobs. These will build on the actions the 

President has been urging Congress to complete that will strengthen the economy and 

create jobs, but also include new measures 

that will accelerate job growth in the short 

term. These could include a mix of tax cuts 

to create jobs and provide economic security 

to the middle class, innovative infrastructure 

ideas to put people back to work, and some 

measures specifically targeted at the longterm unemployed and other specific sectors of 

the economy that are in particular need.

MID-SESSION UPDATE

The Mid-Session Review updates estimates 

of Federal receipts, outlays, and the deficit for 

legislation enacted through August 3, 2011—

principally the Budget Control Act of 2011—

and for a revised economic forecast, technical 

re-estimates, and other policy changes that 

have occurred since the February Budget was 

released. The economic forecast, like the one 

in the Congressional Budget Office’s August 

update, is based on economic data available 

through late June. In addition, reflecting the 

substantial data revisions since that date, the 

Mid-Session Review presents an alternative 

economic forecast using the latest available 

data along with estimates of the associated 

budgetary consequences of this forecast revision. As shown in Table 4, the budgetary effects of the latest economic data are generally 

similar to the forecast based on data from late 

June.

Revised Deficit and Debt Outlook

The deficit for 2011 is now expected to be 

$1.316 trillion, down $329 billion from the 

deficit of $1.645 trillion deficit estimated in 

February. As a percentage of GDP, the 2011 

deficit is projected to be 8.8 percent of GDP, 

as compared to 10.9 percent of GDP projected in February. This latest projection also 

represents a slight decline in the deficit as 

a percent of GDP from 9.0 percent in 2010.

A little less than half of the reduction in the 

estimated 2011 deficit from February is due 

to higher receipts. The remainder is due to a 

combination of lower discretionary appropriations for 2011 than in the February Budget, 

as provided in the full-year continuing appropriations enacted in April, and slower-thanexpected spending across a range of Federal 

programs, including defense discretionary 

spending, purchases of GSE preferred stock, 

and unemployment benefits. The lower projected deficit this year means that the Federal 

Government’s borrowing needs should be lower as well.

Relative to the February estimate, deficits are also expected to be lower in 2012 

and in each subsequent year of the 10-year 

budget window, amounting to a total reduction of $1.450 trillion over 2012 through 

2021. In 2012, deficits are expected to be 

$145 billion lower as a result of a combination of enacted legislation and policy 

changes ($91 billion) and economic and 

technical re-estimates ($54 billion, chiefly 

from higher receipts). Over the 10-year 

horizon, the total of $1.450 trillion deficit 

reduction from February is more than accounted for by the effect of enacted legislation and policy changes ($1.490 trillion).

The revised Mid-Session Review economic 

forecast, discussed in detail in the next section, increases deficits by $696 billion over 

the 10-year period while technical revisions 

to revenue and spending estimates reduce 

deficits by a nearly offsetting amount.

Taken together, the combined effect of the 

revisions to the economic projections and 

the technical re-estimation produces a deficit increase of $40 billion over the 10-year 

horizon. Using the alternative economic 

forecast that reflects data through late 

August, the economic and technical re-estimate would produce a $220 billion increase 

in the deficit over the next decade.

Federal Government debt held by the public can be viewed as the sum of all prior deficits less prior surpluses and is an important 

indicator of the extent to which Government 

activity affects the financial markets. Debt 

held by the public is projected to be $10.264 

trillion at the end of 2011, or 68.6 percent 

of GDP, lower than the 72.0 percent of GDP 

projected in February. Some debt held by 

the public was used to issue direct loans or 

to purchase financial assets as part of the 

Troubled Asset Relief Program (TARP).  

Debt held by the public excluding these 

and other financial assets is projected to be 

$9.194 trillion at the end of 2011, or 61.4 

percent of GDP, down from February’s estimate of 63.0 percent of GDP.   
SUMMARY 5

For 2012, debt held by the public is projected to increase to $11.307 trillion, or 72.1 

percent of GDP, and to increase further to 

73.5 percent of GDP in 2013.  After 2013, 

however, the deficit is projected to decline 

to levels that result in a declining debt-toGDP ratio, with debt reaching 70.5 percent 

of GDP by the end of the 10-year budget 

window.  Debt net of financial assets is also 

projected to increase in 2012 and 2013, but 

then to begin declining, reaching 61.3 percent of GDP in 2021.

Enacted Legislation

Full-year appropriations. The full-year 

appropriations act, enacted on April 15, extended continuing appropriations at a level 

that was roughly $80 billion below the level 

proposed in the February Budget. The act 

also made changes to the Pell Grant program 

and repealed the Free Choice Voucher program originally enacted under the Affordable 

Care Act. Relative to the February Budget, 

the full-year appropriations act reduces the 

deficit by $51 billion in 2011 and by $49 

billion over the subsequent 10 years, 2012 

through 2021.

Budget Control Act. The Budget 

Control Act of 2011, enacted on August 2, 

authorized increases in the debt ceiling and 

included a number of provisions that reduce budget deficits over the next 10 years.

Incorporating the caps on discretionary budget authority enacted in the Act in the MidSession Review reduces spending relative 

to the February Budget by $740 billion over 

the next 10 years. Additional provisions in 

the Act that relate to program integrity initiatives and higher education financial assistance bring the reduction in spending to 

a total of $753 billion. This total does not 

include the effects of future deficit reduction recommended by the Joint Committee, 

as discussed below.

Other enacted legislation and debt service. Other enacted legislation, including 

the Comprehensive 1099 Taxpayer Protection 

and Repayment of Exchange Subsidy 

Overpayments Act of 2011, has a minimal effect on the deficit. Debt service on the effects 

of enacted legislation brings the total deficit 

reduction due to enacted legislation to $989 

billion over 10 years.

Estimating Changes

New estimates of receipts and outlays due 

to revisions to the economic forecast and technical revisions reduce the deficit significantly 

in 2011. These changes reduce the deficit by 

a smaller amount in 2012 and raise the deficit 

slightly over the 10-year period as a whole.

In 2011, revisions to the economic projection and technical changes reduce the deficit 

by $261 billion, largely because of updated 

information about actual tax collections since 

February and actual spending trends. Higher 

receipts account for $141 billion of this improvement, with lower current-year spending 

accounting for the remainder. The reduction 

in spending is split roughly evenly between 

discretionary programs (largely slower-thananticipated spending for defense programs) 

and mandatory programs (including lower 

payments for GSE preferred stock purchases 

and lower spending for unemployment and 

veterans benefits).

Over the 10-year period, revisions to the economic projection and technical re-estimates 

increase the deficit by $40 billion. Receipts

are reduced by $46 billion, as lower tax collections due to revisions in the economic forecast, 

chiefly lower near-term GDP growth and lower 

projected wage and salary income, are partially offset by increases due to technical factors, such as new data available from 2010 tax 

returns. Increases in outlays due to the new 

economic forecast, mostly the result of higher 

cost-of-living adjustments and debt service on 

all economic changes, are very nearly offset by 

reductions in outlays due to technical changes.

More detail about changes in receipt and outlay projections can be found in the receipt and 

spending sections of the Mid-Session Review.

Deficit Reduction Allowance

The Joint Select Committee on Deficit 

Reduction established by the Budget Control 

Act is tasked with developing legislative proposals for reducing the deficit, with a target of $1.5 trillion in deficit reduction. The 

Administration will be recommending a balanced array of options for reducing the deficit 

that encompasses the entire budget including spending and revenue measures. In light 

of the ongoing Joint Committee process, the 

Mid-Session Review includes a deficit reduc-
6 MID-SESSION REVIEW

tion allowance of $1.5 trillion over 10 years.

The February Budget included specific mandatory and receipt proposals that reduce the 

deficit by $1.0 trillion. The deficit allowance 

in the Mid-Session Review substitutes for 

the specific mandatory and receipt proposals detailed in the February Budget, and is 

not meant to prejudge any specific spending or receipt proposals to be recommended 

by the Administration and considered by the 

Committee. The Administration will release 

its recommendations for proposals to be considered by the Joint Committee in September.

Relative to the policies already proposed in 

February, the Mid-Session Review’s allowance 

for Joint Committee deficit reduction reduces 

the deficit by $501 billion over 10 years, including debt service. 

Table 1. CHANGES IN DEFICITS FROM THE FEBRUARY BUDGET

(In billions of dollars)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012-

2016

2012-

2021

February Budget deficit ������������������������������������������ 1,645 1,101 768 645 607 649 627 619 681 735 774

Percent of GDP ���������������������������������������������������� 10.9% 7.0% 4.6% 3.6% 3.2% 3.3% 3.0% 2.9% 3.0% 3.1% 3.1%

Enacted legislation:

Budget Control Act of 2011 ��������������������������� –* –32 –51 –72 –75 –79 –82 –87 –89 –95 –90 –309 –753

2011 full-year appropriations ������������������������ –51 –21 –6 –3 –2 –2 –2 –2 –3 –4 –4 –35 –49

Other legislation �������������������������������������������� 1 –1 1 1 1 * * * * * * 2 3

Debt service ���������������������������������������������������� –* –* –2 –6 –11 –16 –21 –26 –31 –36 –42 –35 –190

Subtotal, enacted legislation ������������������������������ –50 –54 –58 –80 –88 –97 –105 –115 –123 –135 –135 –376 –989

Economic and technical re-estimates:

Receipts ���������������������������������������������������������� –141 –65 –7 11 22 20 17 17 14 10 7 –19 46

Discretionary programs ��������������������������������� –58 13 22 9 –1 –5 –6 –8 –6 –6 –6 37 6

Mandatory:

Refundable tax credits ������������������������������� 8 6 7 10 14 16 16 15 16 16 17 53 133

Unemployment compensation ������������������� –11 –17 –14 –11 –10 –10 –10 –11 –11 –11 –12 –62 –117

Social Security ��������������������������������������������� –1 9 11 12 13 13 13 12 11 10 8 59 112

Medicaid ����������������������������������������������������� –3 –3 –3 –6 –8 –10 –10 –12 –13 –14 –19 –29 –98

Supplemental Nutrition Assistance 

Program �������������������������������������������������� * 5 3 4 7 8 8 8 7 5 7 28 62

Foreign Military Sales Trust Fund ������������ –* –1 1 1 * –1 –4 –4 –4 –4 –5 * –20

Purchases of GSE preferred stock �������������� –25 ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........

Veterans benefits ����������������������������������������� –10 3 2 2 2 2 2 2 3 3 2 11 24

Civilian and military retirement ��������������� –* 2 2 2 2 2 2 2 2 2 2 10 21

Medicare ������������������������������������������������������ –4 –8 –6 –5 –4 –3 2 3 4 4 8 –25 –4

Other ������������������������������������������������������������ –24 10 7 2 3 1 * –* –* –2 * 23 21

Total mandatory �������������������������������������� –70 6 11 12 18 19 19 17 14 8 9 67 134

Net interest1

 �������������������������������������������������� 10 –5 –23 –29 –13 –11 –8 –9 –12 –13 –16 –81 –140

Allowances for costs of future emergencies ������ –2 –3 –1 –* –* –* –* ......... ......... ......... ......... –6 –6

Subtotal, economic and technical re-estimates � –261 –54 2 3 25 22 21 16 11 –1 –6 –1 40

Change due to moving the February Budget 

proposals to the deficit reduction allowance2 ����� –19 –37 –63 –95 –23 8 –43 –53 –71 –60 –64 –211 –501

Total, changes ���������������������������������������������������������� –329 –145 –120 –171 –86 –66 –126 –152 –183 –195 –205 –588 –1,450

Mid-Session Review deficit ������������������������������������� 1,316 956 648 473 521 583 501 467 498 540 568

Percent of GDP ���������������������������������������������������� 8.8% 6.1% 3.9% 2.7% 2.8% 3.0% 2.4% 2.2% 2.2% 2.3% 2.3%

Note: positive figures represent higher outlays or lower receipts.

*$500 million or less.

1 Includes debt service on all re-estimates.

2 Includes debt service.
7

ECONOMIC ASSUMPTIONS

This Mid-Session Review (MSR) updates 

the economic forecast that was completed last 

November and released with the 2012 Budget 

in early February. The 2012 Budget forecast

projected that the economic recovery which began in 2009 would continue and that unemployment would fall gradually from its elevated levels. As the economy recovered, the 2012 Budget 

forecast inflation to remain moderate, and interest rates to rise gradually. In general terms, the 

forecast for the MSR maintains these assumptions but with modifications to take account of 

information on changing conditions available at 

the time of the completion of the MSR forecast, 

in late June. In addition, to reflect the substantial amount of economic turbulence over the 

past two months, the MSR includes an alternative economic forecast that incorporates the latest data through the end of August along with a 

presentation of its associated budgetary effects. 

Real GDP has risen for eight straight quarters since economic growth resumed in mid2009. Revisions to GDP growth published in 

late July, after the MSR forecast was completed, showed growth slowing sharply in 

the first half of 2011. The unemployment

rate has declined from its peak above 10 percent in October 2009 to 9.1 percent in July 

2011. Following the resumption of real GDP 

growth, the economy began adding jobs, and 

private sector employment has increased in 

each of the past 17 months. The labor market

recovery, however, is occurring only gradually. It will take several years of healthy job 

growth to offset the nearly 9 million jobs 

that were lost between January 2008 and 

February 2010.

Administration policies, as well as the automatic fiscal stabilizers such as the unemployment insurance system, contributed to the 

turnaround in 2009. The American Recovery 

and Reinvestment Act (Recovery Act) was 

passed soon after the President took office at 

a time when jobs were declining by 700,000 

per month. Recent revisions showed GDP falling at that time at a rate even faster than 

previously estimated when the President took 

office, declining at an average annualized rate 

of 7.8 percent in the fourth quarter of 2008 

and the first quarter of 2009, the worst sixmonth period since quarterly data has been 

collected. The Administration’s prompt action 

helped to reverse this precipitous decline, and 

the turnaround in real GDP growth, and later 

in jobs, opened the way to an economic recovery. Further actions by the Administration 

and Congress, culminating in the passage 

of the Tax Relief, Unemployment Insurance 

Reauthorization, and Job Creation Act in 

December 2010, have helped sustain demand 

and foster growth as the Recovery Act has 

phased out and as the economy has faced further, unanticipated challenges.

For example, the steep decline in the housing market ended in 2009, but the housing 

sector has struggled to recover from the recession. Almost 3 million homes have been 

repossessed since 2006, but even so, at the 

beginning of 2011, there were estimated to 

be 5 million seriously delinquent mortgage 

loans, many of which will eventually result 

in foreclosure. Government programs and 

the private sector HOPE Now alliance have 

helped nearly 5 million affected homeowners with their mortgages, either by helping 

negotiate new terms for their loans or by 

reducing outstanding balances, but the remaining problems are still significant. Until 

more loans are resolved, house prices are not 

likely to recover, and housing investment will 

probably remain sluggish. Likewise, spreads 

between private debt, such as commercial paper, and Treasury securities have returned to 

pre-crisis levels, but commercial banks and 

other private lenders have tightened credit 

standards and many credit-worthy borrowers 

continue to have difficulty accessing credit, 

making it difficult for businesses to expand, 

entrepreneurs to launch ventures, and families to borrow to buy a new home or send a 

child to college. This is a common experience 

following a financial crisis in which banks and 

other credit market institutions have suffered 

severe losses. If past experience is a guide,

credit will eventually become more available, 

but that will take more time.

A second drag on the recovery has been fiscal consolidation at the State and local government level. Driven by balanced budget requirements and decreased tax revenue, this fiscal 
8 MID-SESSION REVIEW

tightening has reduced aggregate demand 

and slowed growth nationally. Over the last 12 

months, employment in State and local government has declined by 340,000 jobs. 

Third, globally, a combination of events has 

weighed on economic growth. Political uncertainty in the Middle East caused world oil 

markets to tighten, especially for the highquality crude oil that is most useful in refining gasoline. The price of oil rose by 16 percent between September and December 2010 

and then rose another 20 percent in March 

and April of this year, placing a burden on 

American consumers. Although the U.S. economy is less sensitive to oil price shocks than it 

was in the 1970s, higher fuel prices still exact 

a toll, and this was one of the main factors 

in holding growth below expectations in the 

first half of 2011. Also, on March 11, a severe 

earthquake followed by a tsunami seriously 

damaged the coastal regions of northeastern 

Japan. These natural disasters have had a 

worldwide impact because they curtailed production of parts needed for Japanese automobiles manufactured both in Japan and abroad.

In the United States, for example, production 

of motor vehicles fell 6.3 percent (0.53 million 

units at an annual rate) in the second quarter, with most of the decline occurring at the 

American facilities of Japanese automakers.

Moreover, the sovereign debt crisis that began in 2010 in Europe has intensified in recent weeks, causing a selloff in global equity 

markets that threatens to place a new drag 

on consumer confidence and the global recovery. Last year, several European countries encountered difficulty in obtaining credit, and financial markets around the world responded 

negatively to these developments spreading 

the effects of the crisis to the United States 

and elsewhere. The European Union acted 

forcefully to confront these issues when they 

first emerged, and the affected governments 

have attempted to restrain their budget deficits. Even with these actions, however, the 

European recovery remains at risk because of 

increased uncertainty and because the measures taken to address the fiscal crisis have 

had the effect in some cases of limiting demand and hampering recovery. Concerns over 

sovereign debt returned in recent weeks and 

spread to larger countries in the European 

Union, creating volatility in global financial 

markets. 

Although the effects of these events are expected to be temporary in most cases and the 

Administration remains confident about medium-term prospects for growth in the United 

States, the unexpected slowdown in 2011 

led the Administration to reduce projections 

in its MSR forecast for near-term growth in 

2011 and 2012. Meanwhile, new data released since those projections were locked in 

late June, including significant revisions to 

previously released GDP data, together with 

other analysis have led both private and public forecasters to reduce their projections for 

growth and employment even further over the 

past two months. To present a fuller picture, 

this section also includes an alternative forecast in Table 4 below that reflects the latest 

economic data and outlook. While the effects 

of the economic turbulence are great on individuals, the cumulative impact on the fiscal 

condition of the country is relatively minor 

over the course of the budget window.

Despite recent setbacks, the Administration 

expects the economy to grow at increasing 

rates in the months and years to come. One 

reason for this is that the U.S. economy is 

operating well below its capacity, with higher levels of unemployment and more unused 

resources than at any time in over a quarter 

century. The potential for a sharp recovery 

is present in this low level of resource utilization. The normal limits to growth are 

not binding when there is so much unused 

capacity available. With rapid growth projected in 2013-2017, the unemployment rate 

is projected to decline and real GDP is projected to return to its potential level. Beyond 

2017, the Administration’s forecast is based 

on the long-run trends expected for real GDP 

growth, price inflation, and interest rates.

Projected real GDP growth in the long run is 

somewhat below the historical average for the 

United States because of an expected slowdown in the growth of the labor force as the 

population ages. Economic growth is expected 

to average 2.5 percent in the long run, which 

is unchanged from previous forecasts. 

ECONOMIC PROJECTIONS

 Given the substantial amount of economic turbulence that the country experienced 

since the MSR economic projections were 

finalized in June, this section also includes 

an alternative projection that takes into ac-
ECONOMIC ASSUMPTIONS 9

count more recent data. These more recent 

data include both revised historical data for 

the National Income and Product Accounts 

(NIPA) released in July, and updated data on 

current economic conditions and the outlook 

that were not available in June. Table 2 presents a summary of the original projection in 

June and, in the Addendum, the adjustments 

to that original projection related to the 

NIPA revision. These adjustments generally

maintain the same quarterly growth rates 

for GDP and incomes as the original forecast 

but start from the revised historical levels 

in 2011 Q1. In other words, they adjust the 

MSR forecast for the revisions to historical data, but do not reflect how the outlook 

might have changed as a result of the revisions or other more recent data. 

The alternative forecast, shown in Table 4, 

is an update of the projection based on information available through late August. Since 

June, there have been significant changes to 

the economic outlook, including the annual 

revision of the NIPA which showed a large 

downward adjustment in growth in the first 

quarter, a subsequent downward revision of 

growth in the second quarter, and other economic indicators suggesting slower growth 

than originally projected in the second 

half. In addition, the Federal Open Market 

Committee (FOMC) statement in August 

suggested that interest rates will remain at 

their current low level for longer than had 

previously been anticipated. 

Real Gross Domestic Product (GDP) and the 

Unemployment Rate: Real GDP is expected to 

rise by 2.8 percent during the four quarters of 

2011 (2.4 percent in the adjusted forecast) and 

to increase 3.2 percent in the four quarters of 

2012. The growth rate is projected to rise to 

4.0 percent in 2013 and 2014. Beyond 2014, 

real GDP growth is projected to moderate as 

the level of real GDP approaches its potential.

The growth rate is steady at 2.5 percent per 

year in 2018-2021. 

The unemployment rate is projected to average 8.8 percent in 2011, slightly below its 

level in July. Unemployment is projected to 

decline slowly because of the moderate pace 

of expected real GDP growth and because, as 

labor market conditions improve, discouraged 

workers rejoin the labor force, adding temporarily to unemployment. With continued 

growth, the unemployment rate is projected 

to fall, but it is not projected to fall below 6.0 

percent until 2016. These projections reflect 

the close relationship that has prevailed historically between changes in real GDP and 

unemployment.

Table 2. ECONOMIC ASSUMPTIONS1

(Calendar years; dollar amounts in billions)

Actual Projections

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Gross Domestic Product 

(GDP):

Levels, dollar amounts in 

billions:

Current dollars ��������������������� 14,119 14,660 15,281 16,019 16,889 17,851 18,863 19,893 20,906 21,852 22,807 23,798 24,830

Constant (2005) dollars ������� 12,881 13,248 13,586 14,030 14,549 15,131 15,717 16,294 16,820 17,272 17,703 18,146 18,600

Price index (2005 = 100) ������ 109.6 110.7 112.5 114.2 116.1 118.0 120.0 122.1 124.3 126.5 128.8 131.1 133.5

Percent change, Q4/Q4:

Current dollars ��������������������� 0.6 4.2 4.6 4.8 5.7 5.8 5.6 5.4 4.8 4.4 4.4 4.3 4.3

Constant (2005) dollars ������� 0.2 2.8 2.8 3.2 4.0 4.0 3.8 3.6 3.0 2.5 2.5 2.5 2.5

Price index (2005 = 100) ������ 0.5 1.3 1.8 1.6 1.6 1.7 1.7 1.8 1.8 1.8 1.8 1.8 1.8

Percent change, year over year:

Current dollars ��������������������� –1.7 3.8 4.2 4.8 5.4 5.7 5.7 5.5 5.1 4.5 4.4 4.3 4.3

Constant (2005) dollars ������� –2.6 2.9 2.6 3.3 3.7 4.0 3.9 3.7 3.2 2.7 2.5 2.5 2.5

Price index (2005 = 100) ������ 0.9 1.0 1.6 1.5 1.7 1.6 1.7 1.7 1.8 1.8 1.8 1.8 1.8

Incomes, billions of current 

dollars:
10 MID-SESSION REVIEW

Table 2. ECONOMIC ASSUMPTIONS1—Continued

(Calendar years; dollar amounts in billions)

Actual Projections

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Domestic corporate profits ��� 906 1,241 1,322 1,505 1,575 1,622 1,681 1,723 1,759 1,700 1,647 1,627 1,632

Employee compensation ������ 7,812 7,985 8,264 8,625 9,112 9,669 10,270 10,902 11,528 12,127 12,731 13,338 13,935

Wages and salaries ��������������� 6,274 6,399 6,624 6,931 7,352 7,804 8,296 8,817 9,348 9,847 10,353 10,848 11,327

Other taxable income2 ���������� 3,206 3,264 3,427 3,563 3,753 3,973 4,187 4,423 4,673 4,898 5,108 5,305 5,496

Consumer Price Index (all 

urban):3

Level (1982–84 = 100) ���������� 214.5 218.1 224.3 228.4 232.8 237.4 242.2 247.2 252.5 257.7 263.2 268.7 274.4

Percent change, Q4/Q4 ��������� 1.4 1.2 2.8 1.9 1.9 2.0 2.0 2.1 2.1 2.1 2.1 2.1 2.1

Percent change, year/year ���� –0.3 1.6 2.8 1.8 1.9 2.0 2.0 2.1 2.1 2.1 2.1 2.1 2.1

Unemployment rate, civilian, 

percent:

Fourth quarter level ������������� 10.0 9.6 8.6 8.2 7.4 6.7 6.0 5.5 5.2 5.2 5.2 5.2 5.2

Annual average �������������������� 9.3 9.6 8.8 8.3 7.7 6.9 6.3 5.7 5.3 5.2 5.2 5.2 5.2

Federal pay raises, January, 

percent:

Military4 �������������������������������� 3.9 3.4 1.4 1.6 NA NA NA NA NA NA NA NA NA

Civilian5 �������������������������������� 3.9 2.0 0.0 0.0 NA NA NA NA NA NA NA NA NA

Interest rates, percent:

91-day Treasury bills6 ���������� 0.2 0.1 0.1 0.5 1.8 3.2 3.8 4.0 4.1 4.1 4.1 4.1 4.1

10-year Treasury notes �������� 3.3 3.2 3.4 3.8 4.3 4.7 5.0 5.2 5.3 5.3 5.3 5.3 5.3

ADDENDUM:7

Gross Domestic Product 

(GDP), revised:

Levels, dollar amounts in 

billions:

Current dollars ��������������������� 13,939 14,527 15,128 15,859 16,720 17,672 18,674 19,694 20,697 21,633 22,578 23,559 24,582

Constant (2005) dollars ������� 12,703 13,088 13,368 13,804 14,314 14,887 15,464 16,032 16,549 16,993 17,418 17,854 18,300

Price index (2005 = 100) ������ 109.7 111.0 113.2 114.9 116.8 118.7 120.7 122.8 125.0 127.3 129.6 131.9 134.3

Percent change, Q4/Q4:

Current dollars ��������������������� 0.0 4.7 4.4 4.8 5.7 5.8 5.6 5.4 4.8 4.4 4.4 4.3 4.3

Constant (2005) dollars ������� –0.5 3.1 2.4 3.2 4.0 4.0 3.8 3.6 3.0 2.5 2.5 2.5 2.5

Price index (2005 = 100) ������ 0.7 1.6 1.9 1.6 1.6 1.7 1.7 1.8 1.8 1.8 1.8 1.8 1.8

Percent change, year over year:

Current dollars ��������������������� –2.5 4.2 4.1 4.8 5.4 5.7 5.7 5.5 5.1 4.5 4.4 4.3 4.3

Constant (2005) dollars ������� –3.5 3.0 2.1 3.3 3.7 4.0 3.9 3.7 3.2 2.7 2.5 2.5 2.5

Price index (2005 = 100) ������ 1.1 1.2 1.9 1.5 1.7 1.6 1.7 1.7 1.8 1.8 1.8 1.8 1.8

Incomes, billions of current 

dollars, revised:

Domestic corporate profits ��� 1,002 1,418 1,511 1,719 1,800 1,853 1,921 1,969 2,010 1,942 1,882 1,859 1,865

Employee compensation ������ 7,806 7,971 8,251 8,611 9,097 9,653 10,253 10,884 11,509 12,107 12,710 13,316 13,913

Wages and salaries ��������������� 6,270 6,408 6,634 6,940 7,362 7,815 8,308 8,830 9,361 9,862 10,368 10,863 11,343

Other taxable income2 ���������� 2,955 3,108 3,266 3,396 3,573 3,777 3,980 4,201 4,432 4,638 4,828 5,008 5,182

NA = Not Available; Q4/Q4 = fourth quarter over fourth quarter

1 Based on information available as of June 2011.

2 Rent, interest, dividend, and proprietors' income components of personal income.

3 Seasonally adjusted CPI for all urban consumers.

4 Percentages apply to basic pay only; percentages to be proposed for years after 2012 have not yet been determined.

5 Overall average increase, including locality pay adjustments. Percentages to be proposed for years after 2012 have not yet been determined.

6 Average rate, secondary market (bank discount basis).

7 June assumptions adjusted for July 29, 2011 revisions to the National Income and Product Accounts.
ECONOMIC ASSUMPTIONS 11

Inflation: Consumer price inflation rose in 

late 2010 and in the earlier part of this year 

mainly because of a sharp rise in world oil 

prices. Rising food prices also contributed to

the increase. Inflation has moderated since

then as oil prices have declined. Core inflation, which excludes food and energy prices, 

also rose, but much less dramatically than 

the top-line measure. As measured by the 

CPI, core inflation was 1.8 percent between 

July 2010 and July 2011; it had been only 

0.9 percent over the preceding 12 months.

Looking ahead, core inflation is expected to 

edge up somewhat as the economy recovers and unemployment declines. In the long

run, the CPI inflation rate is projected to be 

2.1 percent per year. The other main measure of inflation is the chained price index 

for Gross Domestic Product. Year-over-year 

inflation by this measure is projected at 1.6 

percent in 2011 (1.9 percent adjusted), 1.5 

percent in 2012, and ultimately 1.8 percent 

in 2017-2021.

Interest Rates: The projections for interest 

rates are based on financial market data as of 

June, including market expectations at that 

time. Consequently, the forecast does not incorporate the latest market data, the Federal 

Reserve’s statement in August that short-term 

rates would remain at their current low levels 

through mid-2013, or the dramatic reduction 

in long-term Treasury rates that occurred in 

early August as a result of the “flight to quality” caused by the crisis in Europe. The MSR 

forecast projects the three-month Treasury 

bill rate to average 0.1 percent in 2011, which 

is still likely to be true, but to begin rising 

in 2012 and to reach 4.1 percent by 2017.

In light of the Federal Reserve’s statement, 

the rise in rates in 2012 now seems unlikely. Similar caveats hold for the projection of 

long-term interest rates. The yield on the 10-

year Treasury note is projected to average 3.4 

percent in 2011 and to rise to 5.3 percent by 

2017. Now that long-term yields have fallen 

well below their June values, the forecast for 

2011 appears to be too high. In the later years 

of the forecast, however, when interest rates 

are expected to be close to their historical averages in real terms given the projected rate 

of inflation there is no reason to believe the 

forecast would change based on recent data.

Incomes and Income Shares: Corporate 

profits have rebounded more quickly than 

labor compensation (which consists of wages 

and salaries and employee fringe benefits).

As a result, corporate profits have risen as a 

share of the economy over the past 12 quarters, while labor compensation as a share of 

the economy has fallen below its long-run average. As the economy recovers, this situation 

is expected to reverse. Labor compensation is 

projected to rise somewhat relative to the size 

of the economy, while the share of corporate 

profits is projected to fall. The wage share, 

excluding fringe benefits, is also expected to 

recover from its recent low level in step with 

the increase in compensation. 

FORECAST COMPARISONS

A comparison with the most recent 

Congressional Budget Office (CBO), Blue 

Chip, and FOMC forecasts is shown below in 

Table 3. For 2011, the projected rate of real 

GDP growth is above that of the Blue Chip 

Consensus (an average of about 50 privatesector forecasts) although when the MSR 

forecast was determined in June, the difference was smaller. The CBO forecast, which 

was completed around the same time as the 

Administration’s projections, is similar for 

real GDP in 2011. The FOMC forecast, which 

also dates from June, is slightly higher, mainly 

because the Administration updated its 2011 

forecast for the revisions to the historical data 

for GDP released in late July by the Bureau 

of Economic Analysis. Neither the FOMC nor 

the CBO forecasts were adjusted for these 

new data, which showed lower growth in the 

first half of 2011. The consensus forecast has 

shifted down in the last two months.

In 2012, real GDP growth (fourth quarter 

over fourth quarter) is expected to be 3.2 

percent, which is just below the June FOMC 

central tendency of 3.3 to 3.7 percent, but it 

is well above the latest Blue Chip consensus 

of 2.7 percent, which is the same growth rate 

that CBO projects for 2012. In 2013, CBO 

expects a relatively sharp slowdown in the 

growth rate, because its current-law policy 

assumptions imply that all of the 2001-2003 

tax cuts will expire at the end of 2012. In turn,

CBO expects a relatively rapid growth rate in 

2014-2015.

Looking further into the future, the 

Administration expects the economy eventually to recover much of the ground lost to 
12 MID-SESSION REVIEW

the 2008-2009 recession. This will require 

a phase of relatively rapid growth, which in 

the current forecast is projected to occur in 

2013-2016. The FOMC anticipates a similar 

catch-up. While CBO also expects a catch-up 

during this time frame, it is not as much as 

the Administration or the FOMC is projecting. Meanwhile, the Blue Chip consensus expects to make up relatively little of this lost 

output. This is a major difference in the forecasts for real GDP. All the forecasters have 

a similar expectation for the long-run growth 

rate, which is expected to be around 2-1/2 percent per year.

Table 3. COMPARISON OF ECONOMIC ASSUMPTIONS

(Calendar years; dollar amounts in billions)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Nominal GDP:

MSR �������������������������������������������������� 14,527 15,128 15,859 16,720 17,672 18,674 19,694 20,697 21,633 22,578 23,559 24,582

Budget ����������������������������������������������� 14,651 15,240 16,032 17,006 18,043 19,052 20,037 20,986 21,910 22,866 23,860 24,896

CBO ��������������������������������������������������� 14,660 15,238 15,817 16,301 17,261 18,406 19,333 20,260 21,183 22,140 23,096 24,082

Blue Chip ������������������������������������������ 14,527 15,079 15,727 16,560 17,438 18,327 19,225 20,148 21,095 22,087 23,125 24,212

Percent change, fourth quarter over fourth quarter

Real GDP:

MSR �������������������������������������������������� 3.1 2.4 3.2 4.0 4.0 3.8 3.6 3.0 2.5 2.5 2.5 2.5

Budget ����������������������������������������������� 2.5 3.1 4.0 4.5 4.2 3.6 3.2 2.7 2.5 2.5 2.5 2.5

CBO ��������������������������������������������������� 2.8 2.3 2.7 2013-2016 Average: 3.6 2017-2021 Average: 2.4

Blue Chip ������������������������������������������ 3.1 1.6 2.7

FOMC Central Tendency ����������������� 2.8 2.7–2.9 3.3–3.7 3.5–4.2 Longer Run Average: 2.5–2.8

Percent change, year over year

Real GDP:

MSR �������������������������������������������������� 3.0 2.1 3.3 3.7 4.0 3.9 3.7 3.2 2.7 2.5 2.5 2.5

Budget ����������������������������������������������� 2.7 2.7 3.6 4.4 4.3 3.8 3.3 2.9 2.6 2.5 2.5 2.5

CBO ��������������������������������������������������� 2.9 2.4 2.6 1.7 4.4 5.0 3.2 2.8 2.5 2.5 2.3 2.3

Blue Chip ������������������������������������������ 3.0 1.8 2.5 3.2 3.1 2.9 2.8 2.7 2.6 2.6 2.6 2.6

GDP price index:

MSR �������������������������������������������������� 1.2 1.9 1.5 1.7 1.6 1.7 1.7 1.8 1.8 1.8 1.8 1.8

Budget ����������������������������������������������� 1.0 1.3 1.5 1.6 1.7 1.7 1.8 1.8 1.8 1.8 1.8 1.8

CBO ��������������������������������������������������� 1.0 1.5 1.2 1.4 1.4 1.6 1.8 1.9 2.0 2.0 2.0 2.0

Blue Chip ������������������������������������������ 1.2 2.1 1.9 2.0 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1

Consumer Price Index (CPI-U):

MSR �������������������������������������������������� 1.6 2.8 1.8 1.9 2.0 2.0 2.1 2.1 2.1 2.1 2.1 2.1

Budget ����������������������������������������������� 1.6 1.3 1.8 1.9 2.0 2.0 2.1 2.1 2.1 2.1 2.1 2.1

CBO ��������������������������������������������������� 1.6 2.9 1.5 1.3 1.3 1.8 2.1 2.3 2.3 2.3 2.3 2.3

Blue Chip ������������������������������������������ 1.6 3.0 2.2 2.3 2.4 2.4 2.4 2.4 2.4 2.4 2.4 2.4

Annual average in percent

Unemployment rate:

MSR �������������������������������������������������� 9.6 8.8 8.3 7.7 6.9 6.3 5.7 5.3 5.2 5.2 5.2 5.2

Budget ����������������������������������������������� 9.6 9.3 8.6 7.5 6.6 5.9 5.5 5.3 5.3 5.3 5.3 5.3

CBO ��������������������������������������������������� 9.6 9.4 8.4 7.6 6.8 5.9 5.3 5.3 5.2 5.2 5.2 5.2

Blue Chip ������������������������������������������ 9.6 9.0 8.7 7.5 6.8 6.3 6.0 5.8 5.6 5.6 5.6 5.6

FOMC Central Tendency 1 ���������������� 9.6 8.6–8.9 7.8–8.2 7.0–7.5 Longer Run Average:5.2–5.6

91-day Treasury bills:

MSR �������������������������������������������������� 0.1 0.1 0.5 1.8 3.2 3.8 4.0 4.1 4.1 4.1 4.1 4.1

Budget ����������������������������������������������� 0.1 0.2 0.9 2.6 3.7 4.0 4.1 4.1 4.1 4.1 4.1 4.1

CBO ��������������������������������������������������� 0.1 0.1 0.1 0.2 0.8 1.9 3.2 4.0 4.0 4.0 4.0 4.0

Blue Chip ������������������������������������������ 0.1 0.1 0.5 2.9 3.6 3.8 3.9 4.0 3.9 3.9 3.9 3.9

10-year Treasury notes:

MSR �������������������������������������������������� 3.2 3.4 3.8 4.3 4.7 5.0 5.2 5.3 5.3 5.3 5.3 5.3
ECONOMIC ASSUMPTIONS 13

Table 3. COMPARISON OF ECONOMIC ASSUMPTIONS—Continued

(Calendar years; dollar amounts in billions)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Budget ����������������������������������������������� 3.2 3.0 3.6 4.2 4.6 4.9 5.2 5.3 5.3 5.3 5.3 5.3

CBO ��������������������������������������������������� 3.2 3.3 3.2 3.3 3.8 4.3 4.9 5.3 5.3 5.3 5.3 5.3

Blue Chip ������������������������������������������ 3.2 3.2 3.6 4.9 5.2 5.4 5.4 5.4 5.4 5.4 5.4 5.4

MSR = Mid-Session Review (forecast date June 2011 adjusted for July 2011 National Income and Product Account revisions)

Budget = 2012 Budget (forecast date November 2010)

CBO = Congressional Budget Office (forecast date July 2011)

FOMC = Federal Reserve Open Market Committee (forecast central tendency, date June 2011)

Blue Chip = August 2011 Blue Chip Consensus Forecast extended with March 2011 Blue Chip long-run survey

Sources: Administration; CBO, The Budget and Economic Outlook: an Update, August 2011 

FOMC, Minutes of the Federal Open Market Committee, June 21–22, 2011; Blue Chip Economic Indicators, March and August 2011, 

Aspen Publishers.

1 Fourth quarter levels of unemployment rate.

The Administration projects that unemployment will average 8.8 percent in 2011, 8.3 

percent in 2012, and 7.7 percent in 2013. CBO 

expects unemployment to remain high for a 

longer period. It projects an unemployment 

rate of 8.9 percent in 2011 and 8.7 percent 

in 2012-2013. The latest Blue Chip consensus is: 9.0 percent in 2011 and 8.7 percent in 

2012. The semiannual long-run extension of 

the Blue Chip forecast was released in March 

2011, and the next extension will not be available until October. In March, the Blue Chip 

had expected a larger decline in the unemployment rate, which can be seen in Table 3 in 

the values shown for 2013 through 2021. The 

June FOMC projections also show unemployment falling by more than the latest consensus projections. In the long run, all of the forecasts expect the unemployment rate to reach 

a level of between 5 and 6 percent.

The forecasts are similar for inflation and 

interest rates. All of the forecasters shown in 

Table 3 expect inflation to rise to around 2 

percent per year, which is close to the average 

inflation rate of the past several years. The 

unusually low level of Federal interest rates 

that has prevailed since the financial crisis is 

also expected to end as real interest rates return to near their historical averages but only 

gradually over the next few years. The recent 

consensus expects a slower rise in interest 

rates than was assumed a few months ago.

Table 4. ALTERNATIVE ECONOMIC FORECAST

Economic Assumptions

(Calendar years)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Nominal GDP:

% Change, 4th/4th:

MSR ��������������������������������������������������������� 4.7 4.4 4.8 5.7 5.8 5.6 5.4 4.8 4.4 4.4 4.3 4.3

Alternative ���������������������������������������������� 4.7 3.6 4.5 5.5 5.8 6.0 5.8 5.4 4.3 4.3 4.3 4.3

% Change, Year/Year:

MSR ��������������������������������������������������������� 4.2 4.1 4.8 5.4 5.7 5.7 5.5 5.1 4.5 4.4 4.3 4.3

Alternative ���������������������������������������������� 4.2 3.7 4.1 5.3 5.6 5.9 5.9 5.6 4.7 4.3 4.3 4.3

Real GDP:

% Change, 4th/4th:

MSR ��������������������������������������������������������� 3.1 2.4 3.2 4.0 4.0 3.8 3.6 3.0 2.5 2.5 2.5 2.5

Alternative ���������������������������������������������� 3.1 1.6 2.9 3.8 4.0 4.2 4.0 3.6 2.5 2.5 2.5 2.5

% Change, Year/Year:

MSR ��������������������������������������������������������� 3.0 2.1 3.3 3.7 4.0 3.9 3.7 3.2 2.7 2.5 2.5 2.5

Alternative ���������������������������������������������� 3.0 1.7 2.6 3.5 3.9 4.1 4.1 3.7 2.9 2.5 2.5 2.5
14 MID-SESSION REVIEW

Table 4. ALTERNATIVE ECONOMIC FORECAST—Continued

Economic Assumptions

(Calendar years)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Unemployment Rate:

MSR ��������������������������������������������������������� 9.6 8.8 8.3 7.7 6.9 6.3 5.7 5.3 5.2 5.2 5.2 5.2

Alternative ���������������������������������������������� 9.6 9.1 9.0 8.5 7.8 7.0 6.1 5.5 5.2 5.2 5.2 5.2

Interest Rates:

91-Day Treasury Bills:

MSR ��������������������������������������������������������� 0.1 0.1 0.5 1.8 3.2 3.9 4.0 4.1 4.1 4.1 4.1 4.1

Alternative ���������������������������������������������� 0.1 0.1 0.1 0.4 2.3 3.8 4.0 4.1 4.1 4.1 4.1 4.1

10-Year Treasury Notes:

MSR ��������������������������������������������������������� 3.2 3.4 3.8 4.3 4.7 5.0 5.2 5.3 5.3 5.3 5.3 5.3

Alternative ���������������������������������������������� 3.2 3.0 3.3 3.9 4.6 5.0 5.2 5.3 5.3 5.3 5.3 5.3

Budget Effects of Alternative Forecast Relative to MSR

(Fiscal years; in billions of dollars)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012-

2016

2012-

2021

Receipt changes ������������������������������������������������ –9 –30 –55 –60 –50 –34 –14 –2 –2 –2 –2 –229 –250

Outlay changes:

 Unemployment ������������������������������������������� 2 12 17 22 23 19 12 2 * * * 93 108

 Net interest (rates) ������������������������������������� 2 –14 –43 –54 –38 –26 –23 –20 –18 –17 –16 –175 –270

 All other, including debt service ���������������� * –1 * 4 9 12 14 14 13 13 13 24 91

Total outlay changes ����������������������������� 4 –2 –27 –28 –7 5 2 –4 –5 –3 –3 –58 –71

Deficit increase (–) �������������������������������������������� –13 –28 –28 –32 –43 –39 –17 2 3 1 1 –170 –180

* $500 million or less.
15

RECEIPTS

The Mid-Session Review (MSR) estimates 

of receipts exceed the February Budget estimates by $141 billion in 2011 and by $46 

billion in 2012. In each subsequent year, 

the MSR estimates of receipts are below the 

February Budget estimates, resulting in a net 

decrease in receipts of $882 billion over the 

10-year budget horizon (2012 through 2021).

The net increase in 2011 receipts is in large 

part attributable to the effect of technical revisions based on new tax reporting data, collections to date, and other information as well 

as to revised economic assumptions. The net 

increase in 2012 receipts is primarily attributable to technical revisions and revisions in 

the estimates of expiring provisions extended 

in the adjusted baseline, which increase receipts by $51 billion and $16 billion, respectively. These increases are partially offset by 

a $19 billion reduction in receipts attributable 

to moving the February Budget proposals to 

the MSR’s deficit reduction allowance. The net 

reduction in receipts of $882 billion over the 

10-year budget horizon is primarily due to a 

receipt loss of $828 billion that results from 

moving the February Budget proposals to the 

deficit reduction allowance. The remainder of 

the decrease is due largely to a receipt loss of 

$394 billion attributable to revisions in the 

economic forecast, partially offset by a receipt 

increase of $283 billion attributable to technical revisions. Over the 10-year budget horizon, 

enacted legislation and administrative actions 

reduce receipts by $8 billion and revisions in 

the estimates of expiring provisions extended 

in the February adjusted baseline increase receipts by $64 billion. 

ENACTED LEGISLATION AND 

ADMINISTRATIVE ACTIONS

Changes that have resulted from enacted 

legislation and administrative actions reduce 

receipts from the February Budget by $1 billion in 2011, have a negligible effect in 2012, 

and reduce receipts by $8 billion over the 10-

year budget horizon. The bulk of this reduction in receipts is due to the Comprehensive 

1099 Taxpayer Protection and Repayment of 

Exchange Subsidy Overpayments Act of 2011, 

which repealed certain information reporting 

requirements for tax purposes and modified 

the limitation on repayment of advance premium assistance credits for coverage under 

a qualified health plan. Other legislated tax 

changes and administrative actions included 

repeal of the Free Choice Voucher program 

in the Department of Defense and Full-Year 

Continuing Appropriations Act, and a threemonth extension of the due date for filing the 

Federal highway use tax return. 

REVISIONS IN EXPIRING PROVISIONS 

EXTENDED IN THE ADJUSTED BASELINE 

The February adjusted baseline permanently continued the 2001 and 2003 tax cuts for 

middle-income taxpayers; permanently continued estate, gift, and generation-skipping 

transfer taxes at 2009 parameters; and reflected permanent extension of relief from the AMT.

A reduction in the estimated cost of extending 

these expiring provisions increases receipts 

by $16 billion in 2012 and $64 billion over 10 

years.

1

 The lower cost of extending these provisions is due in large part to reductions in the 

economic forecast for wages and salaries and 

revisions to models of receipts, which were reestimated using current collection experience 

and updated tax data for prior years. 

ECONOMIC CHANGES

Revisions to the economic forecast increase 

receipts by $19 billion in 2011, reduce receipts 

by $2 billion in 2012, and reduce receipts in 

each subsequent year, for a total reduction of 

$394 billion over the 10 years beginning in 

2012 and running through 2021. In 2011, revisions to the economic forecast have the greatest effect on individual and corporation income 

taxes, increasing those sources of receipts by 

$10 billion and $7 billion, respectively. The increase in 2011 individual income tax receipts 

1 The adjusted baseline for the Mid-Session Review 

also includes extensions of the 2001 and 2003 tax 

cuts for high-income taxpayers and extension of 

estate tax relief at current parameters, which are 

more generous than the parameters in effect in 2009. 

The Mid-Session Review proposes to allow these 

provisions to expire, and therefore these provisions 

do not affect the Mid-Session Review policy receipt 

levels.
16 MID-SESSION REVIEW

is primarily attributable to increases in the 

forecasts of wages and salaries and nonwage 

sources of personal income. Changes in the 

forecast of GDP and other economic measures 

that affect the profitability of corporations 

largely account for the increase in 2011 corporation income tax collections.

Over the 10-year budget horizon, revisions 

in the economic forecast have the greatest 

effect on individual income taxes and social 

insurance and retirement receipts, reducing 

collections by $283 billion and $173 billion, 

respectively. Reductions in the economic forecast for wages and salaries account for most of 

the downward revision in individual income 

tax collections over the period. Wages and 

salaries and proprietor’s income are the tax 

base for Social Security and Medicare payroll 

taxes, the largest component of social insurance and retirement receipts. Reductions in 

Social Security and Medicare payroll taxes, 

which are the net effect of reductions in the 

forecast of wages and salaries and increases 

in the forecast of proprietor’s income, account 

for most of the 10-year reduction in social insurance and retirement receipts. 

The reductions in individual income taxes 

and social insurance and retirement receipts 

are partially offset by increases in customs 

duties of $28 billion, due to increases in the 

forecast of imports, and increases in deposits 

of earnings of the Federal Reserve System 

of $26 billion, due to changes in the forecast 

of interest rates. Revisions in the forecast of 

GDP and other sources of income increase 

other sources of receipts (corporation income 

taxes, excise taxes, and estate and gift taxes) 

by a net $9 billion. 

TECHNICAL CHANGES 

Technical revisions in the estimates increase receipts by $122 billion in 2011, $51 

billion in 2012, and $18 billion to $34 billion 

in each subsequent year, for an increase of 

$283 billion over the 10-year budget horizon.

The net increase in receipts in each year is 

primarily due to upward re-estimates of individual income taxes, which are only partially 

offset by downward re-estimates of corporation income taxes and social insurance and retirement receipts. The technical revisions in 

both individual and corporation income taxes 

are in large part attributable to more recent 

collections data and revisions in the tax models based primarily on updated tax data for 

prior years. More recent taxable wage data 

from employer returns accounts for most of 

the technical revision in social insurance and 

retirement receipts.

PRESENTATION OF PROPOSALS

Net of legislative proposals that were enacted, the February Budget included proposals 

estimated to reduce receipts by $1 billion in 

2011, increase receipts by $19 billion in 2012, 

and increase receipts in each subsequent 

year, resulting in a net increase in receipts of 

$828 billion over the 10-year budget horizon.

Shifting these proposals to the Mid-Session 

Review’s deficit reduction allowance reduces 

receipts by an equivalent amount over the 10-

year budget window but has no effect on the 

deficit.
RECEIPTS 17

Table 5. CHANGE IN RECEIPTS

(In billions of dollars)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012-

2016

2012-

2021

February Budget estimate .......................... 2,174 2,627 3,003 3,333 3,583 3,819 4,042 4,257 4,473 4,686 4,923

Changes due to enacted legislation and 

administrative actions ��������������������������������� –1 * –1 –1 –1 –1 –1 –1 –1 –1 –1 –3 –8

Changes due to economic and technical 

revisions in provisions extended in the 

adjusted baseline ������������������������������������������ * 16 –1 5 6 7 6 6 6 7 7 32 64

Changes due to revised economic 

assumptions:

Individual income taxes ������������������������������� 10 –13 –26 –39 –37 –34 –29 –27 –28 –26 –25 –149 –283

Corporation income taxes ���������������������������� 7 12 8 4 1 –2 –3 –2 –3 –7 –10 24 –1

Social insurance and retirement receipts ��� –1 –10 –16 –22 –23 –21 –17 –17 –17 –15 –15 –93 –173

Customs duties ��������������������������������������������� 1 2 3 3 3 3 3 3 3 3 2 14 28

Deposit of earnings, Federal Reserve 

System ������������������������������������������������������ 2 7 8 4 2 1 1 1 1 1 1 21 26

Other ������������������������������������������������������������� –* * * * * 1 1 2 2 2 2 1 10

Total changes due to revised economic 

assumptions ��������������������������������������� 19 –2 –23 –50 –54 –52 –44 –41 –42 –42 –44 –181 –394

Changes due to technical re-estimates:

Individual income taxes ������������������������������� 123 62 30 35 36 36 35 31 29 29 34 199 356

Corporation income taxes ���������������������������� –11 –6 3 –1 –8 –5 –8 –8 –7 –6 –5 –17 –51

Social insurance and retirement receipts ��� 9 –3 –* –2 –4 –5 –6 –8 –7 –6 –8 –13 –48

Other ������������������������������������������������������������� 1 –3 –1 2 2 –1 * 3 6 8 9 –* 26

Total changes due to technical reestimates �������������������������������������������� 122 51 31 34 27 26 20 18 22 25 30 168 283

Changes due to moving the February Budget 

proposals to the deficit reduction allowance ��� 1 –19 –45 –28 –97 –141 –101 –100 –88 –104 –104 –331 –828

Total change in receipts ��������������� 141 46 –39 –40 –119 –162 –119 –117 –103 –115 –112 –315 –882

Mid-Session estimate ................................... 2,314 2,674 2,964 3,292 3,464 3,657 3,923 4,140 4,370 4,571 4,811

* $500 million or less.

19

EXPENDITURES

Outlays for 2011 are now estimated to be 

$3.630 trillion, $189 billion lower than the 

February Budget estimate, due largely to 

reduced appropriations in the Department 

of Defense and Full-Year Continuing 

Appropriations Act as well as slower-thanexpected spending in a number of programs, 

including veterans benefits and the purchases of GSE preferred stock. Relative to the 

February Budget, total outlays have decreased 

by $59 billion in 2012 and by $832 billion over 

10 years. These changes are largely the effect of the caps on future discretionary budget 

authority enacted in the Budget Control Act 

of 2011 (BCA).

POLICY CHANGES

Changes due to Enacted Legislation

Legislation enacted since the release of the 

February Budget has had a sizable, downward 

impact on outlays in 2011, decreasing spending by $51 billion. Over the subsequent 10 

years, 2012 through 2021, enacted legislation 

reduces outlays by $997 billion. The largest of

these changes is the enactment of the BCA.

Budget Control Act of 2011. The BCA, enacted on August 2, authorized increases in the 

debt ceiling and included a number of provisions that will reduce budget deficits over the 

next 10 years. Reflecting the caps on discretionary budget authority enacted in the BCA 

in the 2012 MSR reduces spending relative to 

the February Budget by $740 billion over the 

next 10 years. Additional provisions in the 

BCA related to program integrity initiatives 

and higher education financial assistance further reduce spending since the Budget over 

10 years by $13 billion.

Full-year Appropriations for Fiscal 

Year 2011. The Department of Defense and 

Full-Year Continuing Appropriations Act, enacted in April, provided final appropriations 

for the Department of Defense and extended 

the continuing resolution funding non-defense 

programs to the end of 2011 at reduced levels.

Relative to the February Budget, it reduced 

outlays by $51 billion in the current year, and 

is projected to reduce outlays by an additional 

$49 billion from 2012 to 2021. 

Changes in Administration Policy

The BCA also created the Joint Select 

Committee on Deficit Reduction, which is 

charged with recommending legislation by 

November 23, 2011 to produce an additional 

$1.5 trillion in deficit reduction over the next 

10 years. As a placeholder for the recommendations of the Joint Committee, the MSR 

includes an allowance for deficit reduction 

equaling the Joint Committee’s $1.5 trillion 

target. The Administration maintains its 

support for the specific mandatory and receipt 

proposals included in the February Budget, 

as shown in Summary Table S-9 of the MSR, 

“Mandatory and Receipt Proposals from the 

February Budget.” The estimates for the 

MSR shift the presentation of these proposals, along with their associated debt service 

savings, into the Joint Committee allowance 

to assume compliance with the requirements 

of the BCA. Removing the February mandatory proposals and debt service from the MSR 

outlay totals reduces spending in the MSR 

relative to the February Budget by $18 billion 

in 2011 but increases spending by $171 billion 

over the subsequent 10 years.

The MSR also reflects the Administration’s 

strengthened commitment to permanent, fiscally responsible reform to Medicare physician 

payment rates. It affirms the Administration’s 

commitment to permanent reform by including in the adjusted baseline the expected 

costs of a zero percent update throughout the 

10-year budget window, instead of the large 

cuts under current law. 

ESTIMATING CHANGES

Estimating changes are due to factors other 

than enacted legislation or changes in policy, 

including changes in economic assumptions, 

discussed earlier in this Review, and changes 

in technical factors. Relative to the Budget 

estimate, economic and technical changes decrease estimated outlays for 2011 by $120 bil-
20 MID-SESSION REVIEW

lion while reducing outlays by $6 billion from 

2012 through 2021.

Discretionary appropriations. Outlays 

for discretionary appropriations fall by $58 

billion in 2011 and increase by $6 billion over 

the next 10 years relative to the Budget as 

a result of technical revisions. These changes reflect lower outlays in 2011 compared to 

the February Budget for both security and 

non-security discretionary programs. The 

Departments of Defense, Education, Energy, 

and Homeland Security show significantly 

lower outlays in 2011 than projected in the 

Budget due to technical revisions. Over the 

next 10 years, spending for security programs 

rises by $51 billion, which is offset by decreases in non-security related programs of $45 billion from 2012 through 2021.

Refundable Tax Credits. Changes in 

technical assumptions increase estimated 

outlays for refundable tax credits by $8 billion in 2011 and by $133 billion over the 10-

year period. Refundable tax credits are paid 

out as outlays when the amount of the credit 

exceeds a taxpayer’s income tax liability; the 

remaining portion of the credits is recorded as 

reductions in tax receipts. Most of this impact is the result of changes to estimates of 

the premium assistance and earned income 

tax credits. Technical changes to the models 

used by Treasury to estimate these programs 

resulted in more low-income filers being projected to claim these credits.

Unemployment compensation. Changes 

in economic and technical assumptions decrease outlays for unemployment benefits by 

$11 billion in 2011 and $17 billion in 2012.

Over the 10-year period of 2012 through 2021, 

outlays are down by $117 billion relative to 

the February Budget estimate. The reduction 

is driven by a lower-than-expected insured 

unemployment rate as well as a decline in 

the average weekly unemployment benefit.

Additional technical changes arise from a respecification of the estimating equations used 

in the Department of Labor’s unemployment 

model.

Social Security. Estimating changes reduce outlays for Social Security by $1 billion 

in 2011 but increase outlays by $112 billion 

over the next 10 years. Spending increases 

in both the Old Age and Survivors Insurance 

(OASI) and Disability Insurance (DI) programs are largely due to higher cost-of-living 

adjustments (COLAs) starting in 2012 than 

were assumed in the February Budget. These 

economic changes are further amplified by increases in outlays due to lower projected mortality rates for persons ages 65 and older and 

revised estimates of the effects of the recession on disability incidence.

Medicaid. Projected Federal outlays for 

Medicaid decrease by $3 billion in 2011 and 

by $98 billion over 10 years relative to the 

February Budget estimates. The decrease 

stems primarily from slower-than-expected 

growth in benefits paid since February as 

well as slower projected growth in the market basket and price indices used to calculate 

Medicaid benefits relative to the February 

Budget.

Supplemental Nutrition Assistance 

Program (SNAP). Outlays for SNAP increase by $62 billion over the next 10 years 

due to economic and technical factors. The 

economic changes arise from a higher participation rate than was assumed in the Budget, 

as well as a higher cost of food in the Thrifty 

Food Plan. Technical changes to the SNAP 

model as well as a correction for spending of 

two-year contingency funding that was inadvertently omitted from the February Budget 

also contribute to the increases.

Foreign military sales. Technical changes decrease spending related to the Foreign 

Military Sales Trust Fund by $20 billion over 

the next 10 years. The decrease can be attributed to an overhaul of the Defense Security 

Cooperation Agency projection model to now 

include statistical methods that will reduce 

volatility in future projections in the sales of 

U.S. defense equipment and services.

Purchases of GSE preferred stock. Lower 

draws requested by Fannie Mae and Freddie 

Mac from Treasury in 2011 under the Preferred 

Stock Purchase Agreement, net of dividends, 

resulted in $25 billion lower projected outlays 

than in the February Budget.  The gross draws 

projected in February were $47 billion.  Based 

on these draws, $17 billion of dividends were 

projected, resulting in net draws of $30 billion.  

The actual gross draws paid were $21 billion 

and the actual dividends were $16 billion, resulting in actual net draws of $5 billion.
EXPENDITURES 21

Veterans benefits. Estimating changes 

reduce 2011 outlays for veterans compensation and pensions and readjustment benefits 

by $10 billion relative to the Budget, but increase outlays by $24 billion over the next 10 

years. Actual experience with Agent Orange 

payments since February resulted in the lower outlay estimate for 2011. Part of the reduction in 2011 was for retroactive payments 

which are now expected to be paid in 2012.

The increases beyond 2011 are also due to 

higher participation and average tuition costs 

in veterans education programs as well as 

higher COLAs leading to higher costs in 2012 

and beyond in the veterans compensation and 

pension program.

Civilian and military retirement.

Economic changes comprise the majority of 

the increase of $21 billion over 10 years in 

spending relative to the Budget for civilian 

and military retirement. The COLA of 2.8 

percent now projected for 2012, up from the 

0.9 percent COLA assumed in February, led 

to the majority of the increases for both civilian and military retirement programs. Small 

COLA decreases in the period from 2013 to 

2016 offset the increase somewhat, but not 

enough to counteract the 2012 increase and 

the effect of the increase on all of the ensuing 

years.

Medicare. Estimating changes reduce outlays for Medicare by $4 billion in 2011 and by 

$4 billion over the next 10 years, most notably 

in the earlier years of the period. Medicare 

Part A and D both increase over the next 10 

years, with this increase more than offset by 

reductions in Part B. The main cause of the 

spending increase in Part A is higher estimated payment updates for providers mainly due 

to lower estimated labor productivity. Part 

D spending increases are due to use of more 

recent data and refined estimates for certain 

populations.  New population projections led 

to higher enrollment projections in all three 

programs, which also contributed to the increases for Medicare Part A and D. The reduction in Part B spending is due to a lower 

estimate relative to the Budget of costs related to permanently overriding the reduction in 

Medicare physician payments dictated by the 

Sustainable Growth Rate (SGR) formula.

Net interest. Excluding the debt service 

associated with enacted legislation and policy 

changes, outlays for net interest are projected to increase from February by $10 billion in 

2011, but to decrease from February by $140 

billion over the subsequent 10 years. The increase in 2011 is due primarily to higher outlays for inflated-indexed Treasury securities, 

driven by higher-than-expected growth in the 

Consumer Price Index. The reductions in 

subsequent years are virtually all due to the 

effect of lower short- and long-term Treasury 

interest rates over the next few years of the 

revised MSR economic forecast, partially offset by increased debt service due to estimating changes in receipts and outlays.
22 MID-SESSION REVIEW

Table 6. CHANGE IN OUTLAYS

(In billions of dollars)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012-

2016

2012-

2021

February estimate .......................................... 3,819 3,729 3,771 3,977 4,190 4,468 4,669 4,876 5,154 5,422 5,697

Changes due to enacted legislation:

Budget Control Act of 2011 ���������������������� –* –32 –51 –72 –75 –79 –82 –87 –89 –95 –90 –309 –753

2011 full-year appropriations ������������������� –51 –21 –6 –3 –2 –2 –2 –2 –3 –4 –4 –35 –49

Other legislation ��������������������������������������� * –* * –* –* –* –1 –1 –1 –1 –1 –1 –4

Debt service ����������������������������������������������� –* –* –2 –6 –11 –16 –21 –26 –31 –36 –42 –35 –190

Subtotal, enacted legislation �������������������������� –51 –53 –59 –81 –89 –97 –106 –116 –124 –136 –136 –379 –997

Changes due to reestimates:

Discretionary appropriations:

Security ��������������������������������������������������� –56 4 26 14 2 1 * 1 1 1 1 48 51

Non-security �������������������������������������������� –2 9 –4 –6 –3 –6 –6 –8 –7 –6 –7 –11 –45

Refundable tax credits ����������������������������� 8 6 7 10 14 16 16 15 16 16 17 53 133

Unemployment compensation ����������������� –11 –17 –14 –11 –10 –10 –10 –11 –11 –11 –12 –62 –117

Social Security ������������������������������������������� –1 9 11 12 13 13 13 12 11 10 8 59 112

Medicaid ��������������������������������������������������� –3 –3 –3 –6 –8 –10 –10 –12 –13 –14 –19 –29 –98

Supplemental Nutrition Assistance 

Program ������������������������������������������������ * 5 3 4 7 8 8 8 7 5 7 28 62

Foreign Military Sales Trust Fund ���������� –* –1 1 1 * –1 –4 –4 –4 –4 –5 * –20

Purchases of GSE preferred stock ������������ –25 ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........

Veterans benefits ��������������������������������������� –10 3 2 2 2 2 2 2 3 3 2 11 24

Civilian and military retirement ������������� –* 2 2 2 2 2 2 2 2 2 2 10 21

Medicare ���������������������������������������������������� –4 –8 –6 –5 –4 –3 2 3 4 4 8 –25 –4

Other programs ���������������������������������������� –26 7 6 2 2 1 –* –* –* –2 * 18 15

Net interest1 ��������������������������������������������� 10 –5 –23 –29 –13 –11 –8 –9 –12 –13 –16 –81 –140

Subtotal, reestimates ������������������������������������� –120 11 9 –8 4 2 4 –* –4 –11 –13 18 –6

Change due to moving the February 

Budget proposals to the deficit reduction 

allowance 2 ��������������������������������������������������� –18 –17 –27 2 18 18 21 26 33 43 55 –6 171

Total change in outlays �������������������������������������� –189 –59 –78 –87 –67 –77 –81 –91 –95 –104 –94 –367 –832

Mid-Session estimate ..................................... 3,630 3,670 3,693 3,891 4,123 4,391 4,588 4,785 5,060 5,317 5,603

*$500 million or less.

1 Includes debt service on all reestimates

2 Includes debt service.
23

SUMMARY TABLES
24 MID-SESSION REVIEW

Table S–1. BUDGET TOTALS

(In billions of dollars and as a percent of GDP)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Totals

2012–

2016

2012–

2021

Budget Totals in Billions of Dollars:

Receipts ����������������������������������������������������������������� 2,163 2,314 2,674 2,964 3,292 3,464 3,657 3,923 4,140 4,370 4,571 4,811 16,050 37,865

Outlays ������������������������������������������������������������������ 3,456 3,630 3,670 3,693 3,891 4,123 4,391 4,588 4,785 5,060 5,317 5,603 19,767 45,120Allowance for Joint Committee deficit 

reduction target ������������������������������������������������� ......... ......... –40 –81 –125 –138 –151 –165 –178 –192 –206 –223 –536 –1,500

Deficit ���������������������������������������������������������������� 1,293 1,316 956 648 473 521 583 501 467 498 540 568 3,181 5,755

Debt held by the public ����������������������������������������� 9,019 10,264 11,307 12,126 12,749 13,411 14,121 14,726 15,288 15,869 16,489 17,137

Debt net of financial assets ���������������������������������� 7,894 9,194 10,130 10,769 11,242 11,762 12,345 12,845 13,312 13,810 14,350 14,918

Gross domestic product (GDP) ��������������������������������� 14,360 14,966 15,673 16,490 17,426 18,423 19,435 20,453 21,404 22,339 23,310 24,322 

Budget Totals as a Percent of GDP:

Receipts ����������������������������������������������������������������� 15.1% 15.5% 17.1% 18.0% 18.9% 18.8% 18.8% 19.2% 19.3% 19.6% 19.6% 19.8% 18.3% 18.9%

Outlays ������������������������������������������������������������������ 24.1% 24.3% 23.4% 22.4% 22.3% 22.4% 22.6% 22.4% 22.4% 22.7% 22.8% 23.0% 22.6% 22.6%Allowance for Joint Committee deficit reduction 

target ����������������������������������������������������������������� ......... ......... –0.3% –0.5% –0.7% –0.8% –0.8% –0.8% –0.8% –0.9% –0.9% –0.9% –0.6% –0.7%Deficit ���������������������������������������������������������������� 9.0% 8.8% 6.1% 3.9% 2.7% 2.8% 3.0% 2.4% 2.2% 2.2% 2.3% 2.3% 3.7% 3.0%

Debt held by the public ����������������������������������������� 62.8% 68.6% 72.1% 73.5% 73.2% 72.8% 72.7% 72.0% 71.4% 71.0% 70.7% 70.5%Debt net of financial assets ���������������������������������� 55.0% 61.4% 64.6% 65.3% 64.5% 63.8% 63.5% 62.8% 62.2% 61.8% 61.6% 61.3%
SUMMARY TABLES 25

Table S–2. EFFECT OF BUDGET PROPOSALS ON PROJECTED DEFICITS

(Deficit increases (+) or decreases (–) in billions of dollars)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Totals

2012–

2016

2012–

2021

Projected deficits in the adjusted baseline1 ........... 1,316 1,033 855 772 868 972 928 930 998 1,079 1,151 4,500 9,586

Percent of GDP ������������������������������������������������������������� 8.8% 6.6% 5.2% 4.4% 4.7% 5.0% 4.5% 4.3% 4.5% 4.6% 4.7% 5.2% 4.9%

Deficit reduction proposals:

Joint Committee deficit reduction target:

Programmatic changes ������������������������������������������� ......... –40 –80 –120 –126 –132 –138 –144 –150 –155 –163 –498 –1,247

Debt service ������������������������������������������������������������� ......... –* –1 –5 –12 –19 –27 –34 –42 –51 –60 –38 –253

Total, Joint Committee deficit reduction target ����� ......... –40 –81 –125 –138 –151 –165 –178 –192 –206 –223 –536 –1,500

Overseas contingency operations (OCO):

Reductions in OCO funding ������������������������������������ ......... –24 –78 –103 –115 –120 –123 –126 –129 –132 –135 –439 –1,084

Debt service ������������������������������������������������������������� ......... –* –1 –5 –11 –17 –24 –30 –37 –45 –53 –33 –221

Total, overseas contingency operations ��������������� ......... –24 –79 –108 –126 –136 –146 –156 –166 –177 –188 –472 –1,305

Expiration of high-income tax cuts: 

Restore high-income tax rates to current law ������� ......... –13 –47 –54 –67 –79 –88 –94 –100 –106 –112 –260 –760

Return estate tax relief to 2009 parameters ��������� –* –* –* –9 –10 –11 –13 –14 –15 –16 –18 –31 –106

Debt service ������������������������������������������������������������� –* –* –1 –3 –7 –11 –16 –21 –27 –34 –41 –21 –160

Total, expiration of high-income tax cuts ����������� –* –13 –47 –66 –84 –101 –117 –129 –142 –156 –171 –311 –1,026

Total deficit reduction ................................................ –* –76 –207 –299 –347 –389 –428 –463 –500 –539 –582 –1,319 –3,831

Resulting deficits in 2012 Mid-Session Review ..... 1,316 956 648 473 521 583 501 467 498 540 568 3,181 5,755

Percent of GDP ������������������������������������������������������������� 8.8% 6.1% 3.9% 2.7% 2.8% 3.0% 2.4% 2.2% 2.2% 2.3% 2.3% 3.7% 3.0%

Memorandum:

Resulting deficit levels if high-income tax cuts are 

not allowed to expire ������������������������������������������������ 1,316 969 695 539 604 684 617 596 640 696 740 3,492 6,781

Percent of GDP �������������������������������������������������������� 8.8% 6.2% 4.2% 3.1% 3.3% 3.5% 3.0% 2.8% 2.9% 3.0% 3.0% 4.1% 3.5%

* $500 million or less.1 See Tables S-3 and S-7 for information on the adjusted baseline.
26 MID-SESSION REVIEW

Table S–3. ADJUSTED BASELINE BY CATEGORY1

(In billions of dollars)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Totals

2012–

2016

2012–

2021

Outlays:

Appropriated (“discretionary”) programs: 2

Security ��������������������������������������������������� 816 835 883 883 874 875 887 903 922 942 962 982 4,402 9,114

Non-security ������������������������������������������ 490 477 440 394 384 387 389 394 401 410 419 427 1,993 4,044

Subtotal, appropriated programs ������� 1,306 1,312 1,324 1,277 1,258 1,262 1,276 1,297 1,323 1,352 1,381 1,410 6,396 13,158

Mandatory programs:

Social Security ���������������������������������������� 701 726 768 813 858 907 959 1,015 1,074 1,138 1,206 1,278 4,305 10,015

Medicare ������������������������������������������������� 446 484 478 524 554 580 631 654 678 738 794 852 2,766 6,482Medicaid ������������������������������������������������� 273 273 266 285 348 386 421 451 480 514 547 586 1,705 4,284

Troubled Asset Relief Program (TARP)3 ��� –110 –38 17 12 6 5 2 1 * * * ......... 42 43

Other mandatory programs ������������������� 644 657 602 559 579 616 668 671 674 713 737 779 3,024 6,598

Subtotal, mandatory programs ���������� 1,954 2,102 2,132 2,192 2,344 2,493 2,681 2,791 2,907 3,103 3,284 3,495 11,843 27,422

Net interest ������������������������������������������������� 196 216 235 297 391 491 572 653 722 789 853 917 1,986 5,920

Adjustments to reflect possible 

emergencies 4 ������������������������������������������� ......... 1 3 7 8 9 9 10 10 10 10 10 36 86

Total outlays ������������������������������������������� 3,456 3,630 3,694 3,773 4,001 4,255 4,538 4,750 4,963 5,253 5,528 5,831 20,260 46,585

Receipts:

Individual income taxes ������������������������������ 899 1,089 1,196 1,294 1,437 1,566 1,694 1,822 1,945 2,064 2,185 2,307 7,187 17,511

Corporation income taxes ��������������������������� 191 194 333 408 481 429 396 451 455 467 466 487 2,045 4,372

Social insurance and retirement receipts:

Social Security payroll taxes ���������������� 632 564 651 721 762 804 861 908 958 1,007 1,051 1,104 3,800 8,827

Medicare payroll taxes �������������������������� 180 188 200 215 232 246 264 279 294 309 323 340 1,156 2,700Unemployment insurance ��������������������� 45 55 55 59 62 64 65 61 59 61 60 61 305 608Other retirement ������������������������������������ 8 8 8 8 8 9 9 9 9 9 10 10 43 89

Excise taxes ������������������������������������������������� 67 70 79 87 97 102 104 108 115 128 134 140 469 1,094

Estate and gift taxes ����������������������������������� 19 7 12 13 15 16 17 18 19 21 22 23 73 176

Customs duties �������������������������������������������� 25 30 34 37 39 42 43 46 48 51 53 55 195 448Deposits of earnings, Federal Reserve 

System ����������������������������������������������������� 76 86 73 55 44 40 39 43 47 50 53 54 252 499

Other miscellaneous receipts ��������������������� 21 22 19 19 52 69 74 78 82 87 93 99 235 674

Total receipts ������������������������������������������ 2,163 2,314 2,661 2,918 3,229 3,387 3,566 3,822 4,032 4,255 4,449 4,681 15,760 36,999

Deficit ............................................................. 1,293 1,316 1,033 855 772 868 972 928 930 998 1,079 1,151 4,500 9,586

Net interest ������������������������������������������������� 196 216 235 297 391 491 572 653 722 789 853 917 1,986 5,920

Primary deficit ......................................... 1,097 1,100 798 557 381 378 400 275 208 209 225 234 2,514 3,666

On-budget deficit ����������������������������������������� 1,370 1,377 1,098 918 836 932 1,050 1,008 1,012 1,076 1,144 1,208 4,834 10,282

Off-budget surplus (–) ��������������������������������� –77 –62 –65 –63 –63 –64 –78 –79 –82 –78 –65 –57 –334 –695
SUMMARY TABLES 27

Table S–3. ADJUSTED BASELINE BY CATEGORY—Continued

(In billions of dollars)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Totals

2012–

2016

2012–

2021

Memorandum, budget authority for appropriated programs: 2

Security �������������������������������������������������������� 857 847 845 850 865 881 897 917 936 956 976 997 4,338 9,119Non-security ����������������������������������������������� 401 370 360 362 369 377 384 392 401 410 419 428 1,852 3,901

Total, appropriated funding ������������������� 1,258 1,218 1,205 1,212 1,234 1,257 1,281 1,308 1,337 1,366 1,395 1,425 6,190 13,021

* $500 million or less.1 See Table S–7 for information on adjustments to the Budget Enforcement Act (BEA) baseline.2 Discretionary spending levels other than overseas contingency operations reflect the budget authority caps under the Budget Control Act of 2011. The split of discretionary spending between security and non-security after 2013 is based on increasing budget authority in each category by the growth rate in the aggregate discretionary 

cap.

3 Outlays for TARP in 2011 and subsequent years result from obligations incurred through October 3, 2010 for the Home Affordable Modification Program and other 

TARP programs.

4 These amounts represent a placeholder for major disasters requiring Federal assistance for relief and reconstruction. Such assistance might be provided in the form 

of discretionary or mandatory outlays or tax relief. These amounts are included as outlays for convenience.
28 MID-SESSION REVIEW

Table S–4. PROPOSED BUDGET BY CATEGORY

(In billions of dollars)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Totals

2012–

2016

2012–

2021

Outlays:

Appropriated (“discretionary”) programs:1

Security ������������������������������������������������ 816 835 860 805 771 761 768 781 797 813 830 847 3,964 8,031Non-security ��������������������������������������� 490 477 440 394 384 387 388 393 401 410 419 427 1,993 4,043

Subtotal, appropriated programs ���� 1,306 1,312 1,300 1,199 1,155 1,147 1,156 1,174 1,198 1,223 1,248 1,274 5,957 12,074

Mandatory programs:

Social Security ������������������������������������� 701 726 768 813 858 907 959 1,015 1,074 1,138 1,206 1,278 4,305 10,015Medicare ���������������������������������������������� 446 484 478 524 554 580 631 654 678 738 794 852 2,766 6,482Medicaid ���������������������������������������������� 273 273 266 285 348 386 421 451 480 514 547 586 1,705 4,284Troubled Asset Relief Program 

(TARP) 2 ������������������������������������������� –110 –38 17 12 6 5 2 1 * * * ......... 42 43

Other mandatory programs ���������������� 644 657 602 559 579 616 668 671 674 713 737 779 3,024 6,598

Subtotal, mandatory programs ������� 1,954 2,102 2,132 2,192 2,344 2,493 2,681 2,791 2,907 3,103 3,284 3,495 11,843 27,422

Net interest ���������������������������������������������� 196 216 235 296 384 473 545 613 671 724 775 824 1,932 5,539Adjustments to reflect possible 

emergencies 3 ���������������������������������������� ......... 1 3 7 8 9 9 10 10 10 10 10 36 86Total outlays ���������������������������������������� 3,456 3,630 3,670 3,693 3,891 4,123 4,391 4,588 4,785 5,060 5,317 5,603 19,767 45,120

Receipts:

Individual income taxes ��������������������������� 899 1,089 1,209 1,341 1,491 1,633 1,773 1,910 2,039 2,164 2,291 2,420 7,447 18,271Corporation income taxes ������������������������ 191 194 333 408 481 429 396 451 455 467 466 487 2,045 4,372Social insurance and retirement receipts:

Social Security payroll taxes ������������� 632 564 651 721 762 804 861 908 958 1,007 1,051 1,104 3,800 8,827Medicare payroll taxes ����������������������� 180 188 200 215 232 246 264 279 294 309 323 340 1,156 2,700Unemployment insurance ������������������ 45 55 55 59 62 64 65 61 59 61 60 61 305 608Other retirement ��������������������������������� 8 8 8 8 8 9 9 9 9 9 10 10 43 89

Excise taxes ���������������������������������������������� 67 70 79 87 97 102 104 108 115 128 134 140 469 1,094Estate and gift taxes �������������������������������� 19 7 12 13 24 26 28 31 33 36 38 41 104 282Customs duties ����������������������������������������� 25 30 34 37 39 42 43 46 48 51 53 55 195 448Deposits of earnings, Federal Reserve 

System �������������������������������������������������� 76 86 73 55 44 40 39 43 47 50 53 54 252 499

Other miscellaneous receipts ������������������ 21 22 19 19 52 69 74 78 82 87 93 99 235 674

Total receipts ��������������������������������������� 2,163 2,314 2,674 2,964 3,292 3,464 3,657 3,923 4,140 4,370 4,571 4,811 16,050 37,865

Allowance for Joint Committee deficit 

reduction target 4 .................................. ......... ......... –40 –81 –125 –138 –151 –165 –178 –192 –206 –223 –536 –1,500

Deficit .......................................................... 1,293 1,316 956 648 473 521 583 501 467 498 540 568 3,181 5,755

Net interest 4 ��������������������������������������������� 196 216 234 295 378 461 525 587 636 682 724 763 1,893 5,286Primary deficit/surplus (–) ................. 1,097 1,100 722 353 95 60 58 –86 –169 –184 –184 –195 1,287 469
SUMMARY TABLES 29

Table S–4. PROPOSED BUDGET BY CATEGORY—Continued

(In billions of dollars)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Totals

2012–

2016

2012–

2021

On-budget deficit �������������������������������������� 1,370 1,377 1,020 710 536 585 661 580 549 576 606 625 3,513 6,449Off-budget surplus (–) ������������������������������ –77 –62 –64 –63 –63 –64 –78 –79 –82 –78 –66 –57 –332 –694

Memorandum, budget authority for appropriated programs: 1

Security ����������������������������������������������������� 857 847 811 736 748 761 775 791 807 824 841 858 3,831 7,952Non-security �������������������������������������������� 401 370 360 362 369 376 384 392 401 410 419 428 1,851 3,900

Total, appropriated funding ���������������� 1,258 1,218 1,170 1,098 1,117 1,137 1,159 1,183 1,208 1,234 1,260 1,286 5,682 11,852

* $500 million or less.1 Discretionary spending levels other than overseas contingency operations reflect the budget authority caps under the Budget Control Act of 2011. The split of discretionary spending between security and non-security after 2013 is based on increasing budget authority in each category by the growth rate in the aggregate discretionary 

cap.

2 Outlays for TARP in 2011 and subsequent years result from obligations incurred through October 3, 2010 for the Home Affordable Modification Program and other 

TARP programs.

3 These amounts represent a placeholder for major disasters requiring Federal assistance for relief and reconstruction. Such assistance might be provided in the form 

of discretionary or mandatory outlays or tax relief. These amounts are included as outlays for convenience.

4 Includes debt service on Joint Committee proposals.
30 MID-SESSION REVIEW

Table S–5. PROPOSED BUDGET BY CATEGORY AS A PERCENT OF GDP

(As a percent of GDP)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Averages

2012–

2016

2012–

2021

Outlays:

Appropriated (“discretionary”) programs: 1

Security ���������������������������������������������������������������� 5.7 5.6 5.5 4.9 4.4 4.1 4.0 3.8 3.7 3.6 3.6 3.5 4.6 4.1Non-security ������������������������������������������������������� 3.4 3.2 2.8 2.4 2.2 2.1 2.0 1.9 1.9 1.8 1.8 1.8 2.3 2.1

Subtotal, appropriated programs �������������������� 9.1 8.8 8.3 7.3 6.6 6.2 5.9 5.7 5.6 5.5 5.4 5.2 6.9 6.2

Mandatory programs:

Social Security ����������������������������������������������������� 4.9 4.8 4.9 4.9 4.9 4.9 4.9 5.0 5.0 5.1 5.2 5.3 4.9 5.0Medicare �������������������������������������������������������������� 3.1 3.2 3.1 3.2 3.2 3.1 3.2 3.2 3.2 3.3 3.4 3.5 3.2 3.2Medicaid �������������������������������������������������������������� 1.9 1.8 1.7 1.7 2.0 2.1 2.2 2.2 2.2 2.3 2.3 2.4 1.9 2.1Troubled Asset Relief Program (TARP) 2 ����������� –0.8 –0.3 0.1 0.1 * * * * * * * ......... 0.1 *Other mandatory programs �������������������������������� 4.5 4.4 3.8 3.4 3.3 3.3 3.4 3.3 3.1 3.2 3.2 3.2 3.5 3.3

Subtotal, mandatory programs ����������������������� 13.6 14.0 13.6 13.3 13.5 13.5 13.8 13.6 13.6 13.9 14.1 14.4 13.5 13.7

Net interest �������������������������������������������������������������� 1.4 1.4 1.5 1.8 2.2 2.6 2.8 3.0 3.1 3.2 3.3 3.4 2.2 2.7Adjustments to reflect possible emergencies 3 �������� ......... * * * * * * * * * * * * *

Total outlays �������������������������������������������������������� 24.1 24.3 23.4 22.4 22.3 22.4 22.6 22.4 22.4 22.7 22.8 23.0 22.6 22.6

Receipts:

Individual income taxes ������������������������������������������� 6.3 7.3 7.7 8.1 8.6 8.9 9.1 9.3 9.5 9.7 9.8 9.9 8.5 9.1Corporation income taxes ���������������������������������������� 1.3 1.3 2.1 2.5 2.8 2.3 2.0 2.2 2.1 2.1 2.0 2.0 2.3 2.2Social insurance and retirement receipts:

Social Security payroll taxes ����������������������������� 4.4 3.8 4.2 4.4 4.4 4.4 4.4 4.4 4.5 4.5 4.5 4.5 4.3 4.4Medicare payroll taxes ��������������������������������������� 1.3 1.3 1.3 1.3 1.3 1.3 1.4 1.4 1.4 1.4 1.4 1.4 1.3 1.3Unemployment insurance ���������������������������������� 0.3 0.4 0.4 0.4 0.4 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3Other retirement ������������������������������������������������� 0.1 0.1 0.1 0.1 * * * * * * * * * *

Excise taxes �������������������������������������������������������������� 0.5 0.5 0.5 0.5 0.6 0.6 0.5 0.5 0.5 0.6 0.6 0.6 0.5 0.5Estate and gift taxes ������������������������������������������������ 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.2 0.2 0.2 0.2 0.2 0.1 0.1Customs duties ��������������������������������������������������������� 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2Deposits of earnings, Federal Reserve System ������� 0.5 0.6 0.5 0.3 0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.3 0.3Other miscellaneous receipts ���������������������������������� 0.1 0.1 0.1 0.1 0.3 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.3 0.3

Total receipts ������������������������������������������������������� 15.1 15.5 17.1 18.0 18.9 18.8 18.8 19.2 19.3 19.6 19.6 19.8 18.3 18.9

Allowance for Joint Committee deficit 

reduction target 4 .................................................. ......... ......... –0.3 –0.5 –0.7 –0.8 –0.8 –0.8 –0.8 –0.9 –0.9 –0.9 –0.6 –0.7

Deficit .......................................................................... 9.0 8.8 6.1 3.9 2.7 2.8 3.0 2.4 2.2 2.2 2.3 2.3 3.7 3.0

Net interest 4 ������������������������������������������������������������� 1.4 1.4 1.5 1.8 2.2 2.5 2.7 2.9 3.0 3.1 3.1 3.1 2.1 2.6Primary deficit/surplus (–) ................................. 7.6 7.4 4.6 2.1 0.5 0.3 0.3 –0.4 –0.8 –0.8 –0.8 –0.8 1.6 0.4On-budget deficit ������������������������������������������������������ 9.5 9.2 6.5 4.3 3.1 3.2 3.4 2.8 2.6 2.6 2.6 2.6 4.1 3.4Off-budget surplus (–) ���������������������������������������������� –0.5 –0.4 –0.4 –0.4 –0.4 –0.3 –0.4 –0.4 –0.4 –0.4 –0.3 –0.2 –0.4 –0.4
SUMMARY TABLES 31

Table S–5. PROPOSED BUDGET BY CATEGORY AS A PERCENT OF GDP—Continued

(As a percent of GDP)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Averages

2012–

2016

2012–

2021

Memorandum, budget authority for appropriated programs: 1

Security ��������������������������������������������������������������������� 6.0 5.7 5.2 4.5 4.3 4.1 4.0 3.9 3.8 3.7 3.6 3.5 4.4 4.1Non-security ������������������������������������������������������������ 2.8 2.5 2.3 2.2 2.1 2.0 2.0 1.9 1.9 1.8 1.8 1.8 2.1 2.0

Subtotal, appropriated programs ����������������������� 8.8 8.1 7.5 6.7 6.4 6.2 6.0 5.8 5.6 5.5 5.4 5.3 6.5 6.0

*0.05 percent of GDP or less.1 Discretionary spending levels other than overseas contingency operations reflect the budget authority caps under the Budget Control Act of 2011. The split of 

discretionary spending between security and non-security after 2013 is based on increasing budget authority in each category by the growth rate in the aggregate discretionary cap.

2 Outlays for TARP in 2011 and subsequent years result from obligations incurred through October 3, 2010 for the Home Affordable Modification Program and other 

TARP programs.

3 These amounts represent a placeholder for major disasters requiring Federal assistance for relief and reconstruction. Such assistance might be provided in the form 

of discretionary or mandatory outlays or tax relief. These amounts are included as outlays for convenience.

4 Includes debt service on Joint Committee proposals.
32 MID-SESSION REVIEW

Table S–6. PROPOSED BUDGET IN POPULATION- AND INFLATION-ADJUSTED DOLLARS

(In billions of constant dollars, adjusted for population growth)

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Outlays:

Appropriated ("discretionary") programs: 1

Security ���������������������������������������������������������������������������������� 860 782 728 697 683 673 667 660 654 647Non-security ������������������������������������������������������������������������� 440 383 362 354 345 339 336 333 330 327

Subtotal, appropriated programs ������������������������������������� 1,300 1,165 1,090 1,051 1,028 1,013 1,002 993 983 974

Mandatory programs:

Social Security ����������������������������������������������������������������������� 768 790 810 831 853 875 899 924 950 976Medicare �������������������������������������������������������������������������������� 478 509 523 531 561 564 568 599 625 651Medicaid �������������������������������������������������������������������������������� 266 277 328 353 374 389 402 417 431 448Troubled Asset Relief Program (TARP)2 ������������������������������ 17 11 6 4 2 1 * * * .........Other mandatory programs �������������������������������������������������� 602 543 546 565 594 578 564 579 581 595

Subtotal, mandatory programs ���������������������������������������� 2,132 2,130 2,213 2,285 2,384 2,407 2,433 2,519 2,587 2,671

Net interest ������������������������������������������������������������������������������� 235 287 362 434 484 529 561 588 610 630Adjustments to reflect possible emergencies3 �������������������������� 3 7 8 8 8 8 8 8 8 8

Total outlays �������������������������������������������������������������������������� 3,670 3,589 3,673 3,777 3,905 3,958 4,005 4,108 4,188 4,282

Receipts:

Individual income taxes ������������������������������������������������������������ 1,209 1,303 1,408 1,496 1,577 1,647 1,706 1,757 1,805 1,850Corporation income taxes ��������������������������������������������������������� 333 396 454 393 352 389 381 379 367 372Social insurance and retirement receipts:

Social Security payroll taxes ����������������������������������������������� 651 701 719 737 766 783 802 817 828 844Medicare payroll taxes ��������������������������������������������������������� 200 209 219 225 234 240 246 251 254 260Unemployment insurance ���������������������������������������������������� 55 58 59 58 58 53 49 50 47 47Other retirement ������������������������������������������������������������������� 8 8 8 8 8 8 8 8 7 8

Excise taxes ������������������������������������������������������������������������������� 79 85 92 94 92 94 96 104 105 107Estate and gift taxes ����������������������������������������������������������������� 12 13 22 24 25 27 28 29 30 31Customs duties �������������������������������������������������������������������������� 34 36 37 38 39 39 40 41 42 42Deposits of earnings, Federal Reserve System ������������������������ 73 54 41 37 35 37 39 41 42 41Other miscellaneous receipts ��������������������������������������������������� 19 19 49 63 66 67 68 71 73 76

Total receipts ������������������������������������������������������������������������� 2,674 2,880 3,108 3,173 3,252 3,384 3,465 3,548 3,601 3,677

Allowance for Joint Committee deficit reduction target4 –40 –79 –118 –127 –134 –142 –149 –156 –162 –171Deficit ........................................................................................... 956 629 447 477 518 432 391 404 425 434

Net interest4 ������������������������������������������������������������������������������� 234 286 357 422 467 506 533 554 570 584Primary deficit/surplus (–) .................................................. 722 343 90 55 51 –74 –141 –149 –145 –149On-budget deficit ����������������������������������������������������������������������� 1,020 690 506 536 588 500 460 468 477 478Off-budget surplus (–) ��������������������������������������������������������������� –64 –61 –59 –59 –69 –69 –69 –64 –52 –44
SUMMARY TABLES 33

Table S–6. PROPOSED BUDGET IN POPULATION- AND 

INFLATION-ADJUSTED DOLLARS—Continued

(In billions of constant dollars, adjusted for population growth)

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Memorandum, budget authority for appropriated 

programs: 1Security �������������������������������������������������������������������������������������� 811 715 706 697 689 682 675 669 662 656Non-security ����������������������������������������������������������������������������� 360 352 349 345 341 338 335 333 330 327

Subtotal, appropriated programs ����������������������������������������� 1,170 1,067 1,055 1,042 1,030 1,020 1,011 1,002 992 983

Memorandum, index of population growth and inflation ..... 1.00 1.03 1.06 1.09 1.12 1.16 1.19 1.23 1.27 1.31

* $500 million or less.1 Discretionary spending levels other than overseas contingency operations reflect the budget authority caps under the Budget Control Act of 2011. The split of discretionary spending between security and non-security after 2013 is based on increasing budget authority in each category by the growth rate in the aggregate discretionary 

cap.

2 Outlays for TARP in 2011 and subsequent years result from obligations incurred through October 3, 2010 for the Home Affordable Modification Program and other 

TARP programs.

3 These amounts represent a placeholder for major disasters requiring Federal assistance for relief and reconstruction. Such assistance might be provided in the form 

of discretionary or mandatory outlays or tax relief. These amounts are included as outlays for convenience.

4 Includes debt service on Joint Committee proposals.
34 MID-SESSION REVIEW

Table S–7. BRIDGE FROM BUDGET ENFORCEMENT ACT BASELINE TO ADJUSTED BASELINE

(Deficit increases (+) or decreases (–) in billions of dollars)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Totals

2012-

2016

2012-

2021

BEA baseline deficit .............................................. 1,293 1,314 1,011 654 475 526 585 493 449 468 495 510 3,251 5,666Adjustments for current policy:

Index to inflation the 2011 parameters of the 

AMT ������������������������������������������������������������������� ......... ......... 18 110 106 121 139 159 180 202 227 252 494 1,513

Continue the 2001 and 2003 tax cuts ������������������ ......... ......... 14 113 191 206 221 232 238 245 252 260 744 1,971Extend estate, gift, and generation-skipping 

transfer taxes at current parameters �������������� ......... 1 2 4 33 37 41 45 49 53 57 60 118 382

Prevent reduction in Medicare physician 

payments ����������������������������������������������������������� ......... ......... 13 22 23 25 28 30 33 36 40 43 111 293

Reflect incremental cost of funding existing Pell 

maximum grant award ������������������������������������� ......... ......... -* -* 3 8 8 7 6 6 6 6 18 50Subtotal ������������������������������������������������������������ ......... 1 46 249 356 397 436 473 506 542 581 622 1,485 4,210

Adjustments for provisions contained in the 

Budget Control Act:Set discretionary budget authority at cap levels ����� ......... ......... –27 –54 –74 –87 –97 –104 –112 –120 –128 –138 –339 –942Make disaster relief cap adjustments 1 ���������������� ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........Make program integrity adjustments ������������������ ......... ......... –1 –3 –4 –4 –6 –6 –7 –8 –9 –9 –17 –56

Subtotal ������������������������������������������������������������ ......... ......... –27 –57 –78 –92 –102 –110 –119 –128 –137 –147 –356 –997

Adjustment to reflect costs of possible 

emergencies 2 ..................................................... ......... * 3 7 8 9 9 10 10 10 10 10 36 86

Reclassify surface transportation outlays:

Remove outlays from appropriated category ������� –41 –46 –54 –50 –59 –60 –60 –61 –64 –65 –66 –67 –282 –606Add outlays to mandatory category ��������������������� 41 46 54 50 59 60 60 61 64 65 66 67 282 606

Subtotal ������������������������������������������������������������ ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........

Total program adjustments ���������������������������������� ......... 2 22 199 286 314 343 372 398 425 454 484 1,165 3,298Debt service on adjustments �������������������������������� ......... * * 2 11 27 44 63 84 105 130 156 84 623

Total adjustments �������������������������������������������� ......... 2 22 201 297 342 387 435 481 530 584 640 1,249 3,921

Adjusted baseline deficit ..................................... 1,293 1,316 1,033 855 772 868 972 928 930 998 1,079 1,151 4,500 9,586

*$500 million or less.1 OMB is in the process of developing its estimate of the 10-year average calculation for disaster relief pursuant to section 251(b)(2)(D) of the BCA. OMB's estimate of 

the maximum adjustment for 2012 will be transmitted to the Congress when OMB submits its report in compliance with section 251(b)(2)(D)(ii) of the BCA.

2 These amounts represent a placeholder for major disasters requiring Federal assistance for relief and reconstruction. Such assistance might be provided in the form 

of discretionary or mandatory outlays or tax relief. These amounts are included as outlays for convenience.
SUMMARY TABLES 35

Table S–8. CHANGE IN THE ADJUSTED BASELINE FROM BUDGET TO MSR

(In billions of dollars)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Totals

2012-

2016

2012-

2021

February deficits in the adjusted 

baseline .................................................... 1,597 1,090 846 770 841 938 890 891 960 1,045 1,116Percent of GDP ������������������������������������������ 10.6% 6.9% 5.1% 4.3% 4.5% 4.7% 4.3% 4.1% 4.2% 4.4% 4.5%Conceptual changes in the baseline:

Extend expiring high-income tax cuts 

and current estate tax relief ������������� * 13 47 63 77 91 101 108 115 122 130 290 866

Extend expiring Medicare physician 

payment relief ����������������������������������� ......... 13 22 23 25 28 30 33 36 40 43 111 293

Debt service ������������������������������������������� * * 1 4 10 15 22 29 37 45 55 30 218

Subtotal, conceptual changes ������������ * 26 69 91 112 134 153 169 187 207 228 432 1,377

Revisions due to enacted legislation:

Budget Control Act ������������������������������� –* –26 –50 –78 –97 –108 –116 –124 –133 –143 –153 –359 –1,0282011 full-year appropriations ��������������� –20 –37 –38 –36 –32 –33 –34 –35 –36 –38 –38 –175 –357Other legislative changes ��������������������� 1 –* 2 2 1 1 1 1 1 1 1 6 12Debt service ������������������������������������������� –* –* –2 –7 –14 –21 –29 –38 –47 –56 –67 –44 –281

Subtotal, enacted legislation ������������ –19 –63 –89 –119 –141 –161 –178 –196 –215 –235 –257 –573 –1,654

Revisions due to updated economic 

assumptions:Receipts ������������������������������������������������ –19 2 23 50 54 52 44 41 42 42 44 181 394Mandatory outlays ������������������������������� –* 14 17 20 21 22 22 21 21 22 26 96 209Net interest ������������������������������������������ 12 –2 –14 –15 2 9 15 19 23 27 30 –20 93

Subtotal, economic revisions ������������ –7 14 27 55 78 83 81 81 86 91 100 257 696

Revisions due to updated technical 

assumptions:Receipts ������������������������������������������������� –123 –67 –30 –39 –33 –32 –27 –24 –28 –32 –37 –200 –347Discretionary outlays:

Security ���������������������������������������������� –56 16 30 18 12 13 15 18 21 24 27 89 193Non-security ��������������������������������������� –3 26 12 9 8 8 8 7 7 7 7 63 99

Mandatory outlays: 

Refundable tax credits ����������������������� 8 6 8 11 15 16 16 16 16 17 18 56 139Unemployment compensation ���������� –11 –15 –13 –12 –11 –11 –10 –9 –9 –10 –11 –62 –112Social Security ������������������������������������ –2 –2 –2 –2 –1 * 1 1 1 1 2 –7 –2Medicaid �������������������������������������������� –3 –3 –3 –5 –7 –8 –9 –10 –12 –13 –17 –25 –87Medicare ��������������������������������������������� –4 –4 –1 –* * 1 3 5 6 6 8 –4 24Supplemental Nutrition Assistance 

Program ������������������������������������������ * 5 4 3 5 5 5 4 3 1 –* 22 35

Purchases of GSE preferred stock ����� –25 ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........Veterans benefits �������������������������������� –10 3 1 1 1 1 2 2 2 2 2 7 17Other ��������������������������������������������������� –24 8 7 2 1 –1 –5 –6 –6 –8 –6 18 –13
36 MID-SESSION REVIEW

Table S-8. CHANGE IN THE ADJUSTED BASELINE FROM BUDGET TO MSR—Continued

(In billions of dollars)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Totals

2012-

2016

2012-

2021

Net interest ������������������������������������������ –2 –3 –9 –13 –12 –15 –15 –18 –22 –25 –29 –52 –161Costs of possible emergencies ��������������� –2 –3 –1 –* –* –* –* ......... ......... ......... ......... –6 –6

Subtotal, technical revisions ������������ –255 –35 1 –25 –21 –22 –16 –15 –20 –29 –37 –102 –220

Total changes since February �������������������� –281 –58 8 2 27 34 39 40 38 34 35 14 199

MSR deficits in the adjusted baseline .... 1,316 1,033 855 772 868 972 928 930 998 1,079 1,151

Percent of GDP ������������������������������������������ 8.8% 6.6% 5.2% 4.4% 4.7% 5.0% 4.5% 4.3% 4.5% 4.6% 4.7%

Memorandum:

February funding ("budgetary resources") 

for appropriated programs ������������������� 1,231 1,287 1,307 1,337 1,366 1,396 1,428 1,461 1,496 1,532 1,569Change in funding:

Security ���������������������������������������������� –2 –19 –33 –37 –41 –45 –47 –50 –53 –56 –60 –175 –441Non-security ��������������������������������������� –11 –63 –62 –65 –67 –70 –72 –75 –77 –81 –85 –328 –717

Total change in funding ���������������� –13 –82 –95 –103 –108 –115 –119 –125 –130 –137 –145 –503 –1,158

MSR funding for appropriated programs ����� 1,218 1,205 1,212 1,234 1,257 1,281 1,308 1,337 1,366 1,395 1,425

*$500 million or less.
SUMMARY TABLES 37

Table S–9. MANDATORY AND RECEIPT PROPOSALS FROM THE FEBRUARY BUDGET

(Deficit increases (+) or decreases (–) in millions of dollars)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Totals

2012–

2016

2012–

2021

Tax Provisions:Tax Cuts for Families and Individuals:

Extend earned income tax credit for larger 

families1 ��������������������������������������������������������� ......... ......... 81 1,422 1,442 1,469 1,509 1,544 1,579 1,610 1,657 4,414 12,313

Expand child and dependent care tax credit1�� ......... 283 1,043 1,045 1,042 1,039 1,035 1,036 1,033 1,028 1,021 4,452 9,605Provide for automatic enrollment in IRAs, 

including employer tax credit, and double the tax credit for small employer plan startup costs1������������������������������������������������� ......... ......... 638 1,043 1,100 1,240 1,448 1,704 2,015 2,381 2,809 4,021 14,378

Extend American opportunity tax credit1�������� ......... ......... 650 10,772 10,832 11,552 11,533 11,364 12,111 12,117 12,665 33,806 93,596Provide exclusion from income for student 

loan forgiveness��������������������������������������������� ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........

Tax qualified dividends and net long-term 

capital gains at a 20-percent rate for upperincome taxpayers ������������������������������������������ ......... 7,868 9,582 5,405 9,416 12,964 14,688 15,119 15,586 16,158 16,885 45,235 123,671Total, tax cuts for families and individuals � ......... 8,151 11,994 19,687 23,832 28,264 30,213 30,767 32,324 33,294 35,037 91,928 253,563

Tax Cuts for Businesses:

Eliminate capital gains taxation on 

investments in small business stock������������ ......... ......... ......... ......... ......... ......... 183 566 1,055 1,587 2,026 ......... 5,417

Enhance and make permanent the research 

and experimentation tax credit�������������������� ......... 4,610 8,063 8,884 9,708 10,520 11,318 12,103 12,887 13,686 14,499 41,785 106,278

Provide additional tax credits for investment 

in qualified property used in a qualified advanced energy manufacturing project ����� ......... 284 731 1,089 1,138 578 120 –73 –115 –64 –27 3,820 3,661

Provide tax credit for energy efficient 

commercial building property expenditures in place of existing tax deduction����������������� ......... 450 425 100 25 25 ......... ......... ......... ......... ......... 1,025 1,025Total, tax cuts for businesses ������������������������ ......... 5,344 9,219 10,073 10,871 11,123 11,621 12,596 13,827 15,209 16,498 46,630 116,381

Incentives to promote regional growth:

Extend and modify the New Markets tax 

credit�������������������������������������������������������������� 41 62 116 183 234 263 272 264 243 170 63 858 1,870

Reform and extend Build America bonds1 ������� 1 2 2 2 4 3 3 3 3 3 3 13 28Reform and expand the Low-Income Housing 

Tax Credit (LIHTC) �������������������������������������� 1 5 16 32 52 71 94 116 139 162 185 176 872

Designate Growth Zones1 ��������������������������������� ......... 279 863 860 839 815 186 –383 –374 –329 –273 3,656 2,483

Total, incentives to promote regional growth 43 348 997 1,077 1,129 1,152 555 ......... 11 6 –22 4,703 5,253

Continue certain expiring provisions 

through calendar year 20121 .................... 866 9,959 10,459 734 372 158 61 95 122 169 192 21,682 22,321

Pay for Three Years of AMT Relief:

Reduce the value of certain tax 

expenditures����������������������������������������������� ......... –6,008 –18,996 –26,418 –29,766 –32,696 –35,699 –38,644 –41,496 –44,388 –47,180–113,884–321,291
38 MID-SESSION REVIEW

Table S–9. MANDATORY AND RECEIPT PROPOSALS FROM 

THE FEBRUARY BUDGET—Continued

(Deficit increases (+) or decreases (–) in millions of dollars)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Totals

2012–

2016

2012–

2021

Other Revenue Changes and Loophole 

Closers:Reform treatment of financial institutions and 

products:Impose a financial crisis responsibility 

fee���������������������������������������������������������������� ......... ......... –1,000 –3,000 –3,000 –3,000 –4,000 –4,000 –4,000 –4,000 –4,000 –10,000 –30,000

Require accrual of income on forward sale of 

corporate stock ������������������������������������������� –1 –6 –12 –19 –26 –33 –36 –38 –40 –42 –44 –96 –296

Require ordinary treatment of income from 

day-to-day dealer activities for certain dealers of equity options and commodities –35 –144 –226 –240 –254 –270 –286 –303 –321 –341 –361 –1,134 –2,746

Modify the definition of “control” for 

purposes of section 249 of the Internal Revenue Code��������������������������������������������� ......... –9 –15 –16 –17 –17 –18 –19 –20 –21 –22 –74 –174

Total, reform treatment of financial 

institutions and products ������������������� –36 –159 –1,253 –3,275 –3,297 –3,320 –4,340 –4,360 –4,381 –4,404 –4,427 –11,304 –33,216

Reinstate Superfund taxes ������������������������������� ......... –1,374 –1,926 –2,038 –2,093 –2,144 –2,185 –2,212 –2,246 –2,272 –2,329 –9,575 –20,819Increase Oil Spill Liability Trust Fund 

financing rate by one cent ���������������������������� ......... –35 –46 –46 –46 –46 –46 –46 –47 –46 –47 –219 –451

Make unemployment insurance surtax 

permanent����������������������������������������������������� ......... –1,375 –1,413 –1,449 –1,477 –1,503 –1,526 –1,543 –1,558 –1,577 –1,594 –7,217 –15,015

Repeal LIFO method of accounting for 

inventories����������������������������������������������������� ......... ......... –2,598 –5,649 –6,484 –6,457 –6,435 –6,387 –6,337 –6,293 –6,240 –21,188 –52,880

Repeal gain limitation for dividends received 

in reorganization exchanges������������������������� ......... –47 –79 –81 –84 –86 –89 –92 –94 –97 –100 –377 –849

Reform U.S. international tax system:

Defer deduction of interest expense related 

to deferred income�������������������������������������� ......... –2,986 –5,138 –5,396 –5,636 –5,861 –6,080 –3,114 –1,103 –1,149 –1,202 –25,017 –37,665

Determine the foreign tax credit on a 

pooling basis����������������������������������������������� ......... –2,655 –4,568 –4,798 –5,011 –5,211 –5,406 –5,601 –5,810 –6,051 –6,333 –22,243 –51,444

Tax currently excess returns associated 

with transfers of intangibles offshore������� ......... –1,204 –2,038 –2,114 –2,212 –2,280 –2,290 –2,231 –2,158 –2,138 –2,166 –9,848 –20,831

Limit shifting of income through intangible 

property transfers �������������������������������������� ......... –29 –63 –90 –118 –148 –178 –209 –242 –276 –315 –448 –1,668

Disallow the deduction for excess non-taxed 

reinsurance premiums paid to affiliates��� ......... –129 –223 –237 –250 –264 –277 –289 –302 –315 –328 –1,103 –2,614

Limit earnings stripping by expatriated 

entities�������������������������������������������������������� ......... –212 –364 –382 –401 –421 –442 –464 –487 –512 –537 –1,780 –4,222

Modify tax rules for dual capacity taxpayers ......... –532 –918 –974 –1,031 –1,085 –1,138 –1,190 –1,242 –1,296 –1,352 –4,540 –10,758

Total, reform U.S. international tax 

system�������������������������������������������������� ......... –7,747 –13,312 –13,991 –14,659 –15,270 –15,811 –13,098 –11,344 –11,737 –12,233 –64,979–129,202
SUMMARY TABLES 39

Table S–9. MANDATORY AND RECEIPT PROPOSALS FROM 

THE FEBRUARY BUDGET—Continued

(Deficit increases (+) or decreases (–) in millions of dollars)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Totals

2012–

2016

2012–

2021

Reform treatment of insurance companies and 

products:Modify rules that apply to sales of life 

insurance contracts������������������������������������ ......... –8 –42 –82 –97 –115 –134 –154 –177 –203 –231 –344 –1,243

Modify dividends-received deduction for life 

insurance company separate accounts ����� ......... –172 –465 –547 –579 –605 –607 –585 –555 –528 –503 –2,368 –5,146

Expand pro-rata interest expense 

disallowance for corporate-owned life insurance (COLI) ��������������������������������������� ......... –21 –71 –181 –273 –433 –652 –900 –1,280 –1,714 –2,166 –979 –7,691

Total, reform treatment of insurance 

companies and products ��������������������� ......... –201 –578 –810 –949 –1,153 –1,393 –1,639 –2,012 –2,445 –2,900 –3,691 –14,080

Eliminate fossil fuel tax preferences:

Eliminate coal preferences:

Repeal expensing of exploration and 

development costs ������������������������������� ......... –27 –45 –47 –49 –51 –50 –48 –47 –45 –38 –219 –447

Repeal percentage depletion for hard 

mineral fossil fuels������������������������������

......... –78 –129 –129 –130 –135 –139 –145 –149 –154 –165 –601 –1,353

Repeal capital gains treatment for 

royalties����������������������������������������������� –6 –11 –13 –22 –31 –38 –43 –47 –51 –55 –58 –115 –369

Repeal domestic manufacturing 

deduction for coal and other hard mineral fossil fuels������������������������������

......... –20 –35 –38 –39 –41 –44 –45 –48 –49 –51 –173 –410

Total, eliminate coal preferences ������ –6 –136 –222 –236 –249 –265 –276 –285 –295 –303 –312 –1,108 –2,579

Eliminate oil and gas preferences:

Repeal enhanced oil recovery credit ������ ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........Repeal credit for oil and gas produced 

from marginal wells���������������������������� ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........

Repeal expensing of intangible drilling 

costs �����������������������������������������������������

......... –1,875 –2,512 –1,762 –1,403 –1,331 –1,124 –830 –640 –523 –447 –8,883 –12,447

Repeal deduction for tertiary injectants ......... –6 –10 –10 –10 –10 –10 –9 –9 –9 –9 –46 –92Repeal exception to passive loss 

limitations for working interests in oil and natural gas properties������������ ......... –23 –27 –24 –22 –21 –19 –18 –17 –16 –16 –117 –203

Repeal percentage depletion for oil and 

natural gas wells��������������������������������� ......... –607 –1,038 –1,079 –1,111 –1,142 –1,177 –1,211 –1,243 –1,273 –1,321 –4,977 –11,202

Repeal domestic manufacturing 

deduction for oil and natural gas companies�������������������������������������������� ......... –902 –1,558 –1,653 –1,749 –1,842 –1,932 –2,020 –2,108 –2,200 –2,296 –7,704 –18,260
40 MID-SESSION REVIEW

Table S–9. MANDATORY AND RECEIPT PROPOSALS FROM 

THE FEBRUARY BUDGET—Continued

(Deficit increases (+) or decreases (–) in millions of dollars)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Totals

2012–

2016

2012–

2021

Increase geological and geophysical 

amortization period for independent producers to seven years �������������������� ......... –59 –215 –330 –306 –230 –152 –75 –22 –9 –10 –1,140 –1,408

Total, eliminate oil and gas 

preferences ������������������������������������� ......... –3,472 –5,360 –4,858 –4,601 –4,576 –4,414 –4,163 –4,039 –4,030 –4,099 –22,867 –43,612

Total, eliminate fossil fuel tax 

preferences ������������������������������������������������� –6 –3,608 –5,582 –5,094 –4,850 –4,841 –4,690 –4,448 –4,334 –4,333 –4,411 –23,975 –46,191

Tax carried (profits) interests as ordinary 

income������������������������������������������������������������ –318 –2,274 –2,123 –2,154 –1,927 –1,608 –1,322 –1,089 –908 –762 –640 –10,086 –14,807

Deny deduction for punitive damages ������������� ......... ......... –23 –34 –35 –35 –36 –36 –37 –37 –39 –127 –312Repeal lower-of-cost-or-market inventory 

accounting method���������������������������������������� ......... ......... –188 –1,435 –2,334 –1,532 –1,358 –309 –323 –337 –352 –5,489 –8,168

Simplify the tax code ���������������������������������������� –16 –7 –35 12 23 –141 –147 281 176 107 138 –148 407Reduce the tax gap and make reforms:

Expand information reporting:

Repeal and modify information 

reporting on payments to corporations and payments for property 6 ��������������������������������������������� ......... 475 618 756 929 961 1,000 1,047 1,096 1,147 1,180 3,739 9,209

Require information reporting for 

private separate accounts of life insurance companies �������������������������� ......... ......... –1 –2 –3 –3 –4 –5 –6 –7 –8 –9 –39

Require a certified Taxpayer 

Identification Number from contractors and allow certain withholding ����������������������������������������� –21 –48 –81 –110 –115 –121 –126 –132 –138 –144 –150 –475 –1,165

Total, expand information reporting� –21 427 536 644 811 837 870 910 952 996 1,022 3,255 8,005

Improve compliance by businesses:

Require greater electronic filing of 

returns������������������������������������������������ ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........

Authorize the Department of the 

Treasury to require additional information to be included in electronically filed Form 5500 Annual Reports ���������������������������������� ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........

Implement standards clarifying when 

employee leasing companies can be held liable for their clients’ Federal employment taxes������������������������������ ......... –4 –5 –6 –6 –6 –7 –7 –7 –8 –8 –27 –64

Increase certainty with respect to 

worker classification�������������������������� ......... –12 –230 –1,237 –956 –819 –904 –994 –1,088 –1,186 –1,284 –3,254 –8,710
SUMMARY TABLES 41

Table S–9. MANDATORY AND RECEIPT PROPOSALS FROM 

THE FEBRUARY BUDGET—Continued

(Deficit increases (+) or decreases (–) in millions of dollars)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Totals

2012–

2016

2012–

2021

Repeal special estimated tax payment 

provision for certain insurance companies������������������������������������������� ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........

Eliminate special rules modifying the 

amount of estimated tax payments by corporations����������������������������������� ......... ......... ......... 53,610 –4,320 –49,290 ......... ......... 5,630 –5,630 ......... ......... .........Total, improve compliance by 

businesses �������������������������������������� ......... –16 –235 52,367 –5,282 –50,115 –911 –1,001 4,535 –6,824 –1,292 –3,281 –8,774

Strengthen tax administration ��������������������� ......... –13 –18 –20 –25 –28 –30 –30 –32 –33 –34 –104 –263Expand penalties:

Impose a penalty on failure to comply 

with electronic filing requirements���� ......... ......... ......... ......... ......... –1 –1 –1 –2 –2 –2 –1 –9

Increase penalty imposed on paid 

preparers who fail to comply with EITC due diligence requirements ������ ......... –13 –27 –31 –32 –34 –35 –35 –36 –37 –38 –137 –318

Total, expand penalties�������������������������� ......... –13 –27 –31 –32 –35 –36 –36 –38 –39 –40 –138 –327

Modify estate and gift tax valuation 

discounts and make other reforms:

Make permanent the portability of 

unused exemption between spouses �� ......... ......... ......... 107 217 321 421 516 609 699 791 645 3,681

Require consistency in value for 

transfer and income tax purposes������ ......... –127 –171 –182 –192 –204 –216 –229 –243 –258 –273 –876 –2,095

Modify rules on valuation discounts������ ......... –806 –860 –1,558 –1,687 –1,823 –1,966 –2,116 –2,277 –2,444 –2,629 –6,734 –18,166Require a minimum term for grantor 

retained annuity trusts (GRATs)������� ......... –15 –46 –93 –160 –231 –308 –389 –477 –570 –670 –545 –2,959

Limit Duration of Generation Skipping 

Transfer (GST) Tax Exemption���������� ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........

Total, modify estate and gift tax 

valuation discounts and make other reforms ����������������������������������������������� ......... –948 –1,077 –1,726 –1,822 –1,937 –2,069 –2,218 –2,388 –2,573 –2,781 –7,510 –19,539

Total, reduce the tax gap and make 

reforms ������������������������������������������������ –21 –563 –821 51,234 –6,350 –51,278 –2,176 –2,375 3,029 –8,473 –3,125 –7,778 –20,898

Total, other revenue changes and loophole 

closers ��������������������������������������������������������� –397 –17,390 –29,977 15,190 –44,562 –89,414 –41,554 –37,353 –30,416 –42,706 –38,299–166,153–356,481

Trade Initiatives:

Promote trade���������������������������������������������������� ......... 167 371 514 636 755 837 910 982 1,053 1,127 2,443 7,352

Other Initiatives:

Authorize the limited sharing of business tax 

return information to improve the accuracy of important economic measures ����������������� ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........
42 MID-SESSION REVIEW

Table S–9. MANDATORY AND RECEIPT PROPOSALS FROM 

THE FEBRUARY BUDGET—Continued

(Deficit increases (+) or decreases (–) in millions of dollars)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Totals

2012–

2016

2012–

2021

Eliminate certain reviews conducted by the 

U.S. Treasury Inspector General for Tax Administration (TIGTA)������������������������������� ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........

Modify indexing to prevent deflationary 

adjustments��������������������������������������������������� ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........Total, other initiatives ����������������������������������� ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........

Reauthorize Surface Transportation: 

Transportation Trust Fund:

Outlays �������������������������������������������������������������� ......... 6,726 19,053 16,230 17,980 21,965 27,117 30,412 31,731 32,207 32,077 109,071 235,498Bipartisan financing for Transportation Trust 

Fund��������������������������������������������������������������� ......... –20,000 –28,000 –29,000 –31,000 –32,000 –34,000 –36,000 –38,000 –39,000 –41,000–140,000–328,000Subtotal, transportation trust fund �������������� ......... –13,274 –8,947 –12,770 –13,020 –10,035 –6,883 –5,588 –6,269 –6,793 –8,923 –58,046 –92,502

Upfront investment in aviation����������������������������� ......... 596 2,146 608 ......... ......... ......... ......... ......... ......... ......... 3,350 3,350Upfront investment in TIGER grants������������������� ......... 20 420 680 400 200 140 100 40 ......... ......... 1,860 2,000

Total, reauthorize surface transportation ......... –12,658 –6,381 –11,482 –12,620 –9,835 –6,743 –5,488 –6,229 –6,793 –8,923 –52,976 –87,152

Mandatory Initiatives and Savings:

Agriculture:

Change company reimbursement on crop 

insurance CAT premium ������������������������������ ......... –161 –166 –176 –179 –180 –181 –183 –184 –185 –187 –862 –1,782

Eliminate cotton and peanut storage 

payments ������������������������������������������������������� ......... –1 ......... ......... ......... ......... ......... ......... ......... ......... ......... –1 –1

Enact Animal Plant and Health Inspection 

Service (APHIS) fees������������������������������������� ......... –20 –27 –27 –28 –29 –30 –31 –32 –33 –34 –131 –291

Enact Food Safety and Inspection Service 

(FSIS) performance fee��������������������������������� ......... –11 –12 –12 –12 –13 –13 –13 –13 –13 –13 –60 –125

Enact Grain Inspection, Packers, and 

Stockyards Administration (GIPSA) fees ���� ......... –27 –29 –30 –31 –31 –31 –32 –32 –32 –33 –148 –308

Enact Natural Resources Conservation 

Service (NRCS) fee���������������������������������������� ......... –22 –22 –22 –22 –22 –22 –22 –22 –22 –22 –110 –220

Enact Forest Service payment to 

communities—impact on timber receipts���� ......... ......... –48 –49 –49 –50 –52 ......... ......... ......... ......... –196 –248

Suspend SNAP time limits for able-bodied 

working-age adults without dependents ����� ......... 90 51 1 ......... ......... ......... ......... ......... ......... ......... 142 142

Restore SNAP beneficiary payments 

terminated in P.L. 111–296 �������������������������� ......... ......... ......... 3,239 56 ......... ......... ......... ......... ......... ......... 3,295 3,295

Reduce commodity payments to wealthy 

farmers ���������������������������������������������������������� ......... ......... –228 –261 –312 –315 –265 –278 –285 –284 –283 –1,116 –2,511

Impose biobased labeling fee���������������������������� ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........

Total, Agriculture������������������������������������������� ......... –152 –481 2,663 –577 –640 –594 –559 –568 –569 –572 813 –2,049
SUMMARY TABLES 43

Table S–9. MANDATORY AND RECEIPT PROPOSALS FROM 

THE FEBRUARY BUDGET—Continued

(Deficit increases (+) or decreases (–) in millions of dollars)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Totals

2012–

2016

2012–

2021

Defense:

Shift future Uniformed Services Family 

Health Plan enrollees into TRICARE-forLife/Medicare:Effect on Medicare Eligible Retiree Health 

Care Fund��������������������������������������������������� ......... –1 –4 –12 –24 –43 –68 –99 –137 –183 –238 –84 –809

Effect on accrual payments (non-PAYGO)���� ......... ......... 759 805 850 889 945 1,004 1,067 1,134 1,205 3,303 8,658

Subtotal, shift future Uniformed 

Services Family Health Plan enrollees into TRICARE-For-Life/Medicare����������������������������������������������

......... –1 755 793 826 846 877 905 930 951 967 3,219 7,849

Provide additional accrual payments to the 

Medicare Eligible Retiree Health Care Fund (non-PAYGO)��������������������������������������� ......... –117 ......... ......... ......... ......... ......... ......... ......... ......... ......... –117 –117

Total, Defense������������������������������������������ ......... –1 755 793 826 846 877 905 930 951 967 3,219 7,849

Education:

Pell Grant Protection Act:

Provide mandatory appropriation to sustain 

recent Pell Grant increases 7���������������������� ......... 2,069 6,277 2,995 3,389 3,775 4,200 4,628 5,056 5,489 5,986 18,505 43,864

Eliminate in-school interest subsidies for 

graduate and professional students 8 �������� ......... –984 –3,200 –3,039 –3,019 –3,022 –3,041 –3,110 –3,211 –3,312 –3,343 –13,264 –29,281

Provide current borrowers incentive to 

convert from guaranteed loans to direct loans to simplify loan servicing����������������� ......... –2,136 –20 –16 –10 –10 –10 –11 –11 –13 –7 –2,192 –2,244

Eliminate year-round Pell Grants and 

simplify student aid application9 �������������� –60 –535 –604 –711 –840 –995 –1,157 –1,295 –1,335 –1,372 –1,399 –3,685 –10,243

Reform and expand Perkins loan program��� ......... –578 –1,564 –1,155 –896 –705 –547 –504 –494 –473 –448 –4,898 –7,364Overhaul TEACH Grants and replace with 

Presidential Teaching Fellows������������������� ......... 2 102 150 156 150 138 1 –54 –67 –70 560 508

Establish College Completion Incentive 

Grants��������������������������������������������������������� ......... 2 42 220 288 300 291 93 15 ......... ......... 852 1,251

Accelerate the recall of the Perkins Loan 

revolving fund �������������������������������������������� ......... –384 –618 –727 –764 –113 –197 –25 94 202 342 –2,606 –2,190

Total, Education�������������������������������������� –60 –2,544 415 –2,283 –1,696 –620 –323 –223 60 454 1,061 –6,728 –5,699

Energy:

Repeal ultra-deepwater oil and gas research 

and development program���������������������������� ......... –20 –40 –50 –30 –10 ......... ......... ......... ......... ......... –150 –150

Provide HomeStar rebates for energy efficient 

home retrofits������������������������������������������������ 300 1,800 2,100 1,020 600 180 ......... ......... ......... ......... ......... 5,700 5,700Total, Energy�������������������������������������������������� 300 1,780 2,060 970 570 170 ......... ......... ......... ......... ......... 5,550 5,550
44 MID-SESSION REVIEW

Table S–9. MANDATORY AND RECEIPT PROPOSALS FROM 

THE FEBRUARY BUDGET—Continued

(Deficit increases (+) or decreases (–) in millions of dollars)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Totals

2012–

2016

2012–

2021

Health and Human Services:

Provide physicians relief from sustainable 

growth rate formula (SGR) and offset costs: 10Provide SGR relief through 2013������������������ ......... 18,602 28,593 7,210 ......... ......... ......... ......... ......... ......... ......... 54,405 54,405Offset cost of providing SGR relief through 

2013 with specific health savings3 ������������ ......... –1,571 –2,175 –2,676 –4,759 –6,056 –6,846 –7,037 –7,275 –9,674 –14,164 –17,237 –62,233

Provide SGR relief from 2014 onward ���������� ......... ......... ......... 23,207 32,072 34,692 36,730 39,856 44,760 49,909 54,222 89,971 315,448Offset cost of providing SGR relief from 

2014 onward����������������������������������������������� ......... ......... ......... –23,207 –32,072 –34,692 –36,730 –39,856 –44,760 –49,909 –54,222 –89,971–315,448

Shift future Uniformed Services Family 

Health Plan enrollees into TRICARE-forLIFE/Medicare:Effect on Medicare ����������������������������������������� ......... ......... ......... ......... 20 30 50 70 90 120 150 50 530

Reform child welfare assistance to improve 

permanency and safety��������������������������������� ......... 220 245 249 250 250 250 250 250 250 250 1,214 2,464

Strengthen and expand child care assistance � ......... 381 632 730 749 750 750 750 750 750 750 3,242 6,992Extend TANF supplemental grants����������������� 22 342 64 ......... ......... ......... ......... ......... ......... ......... ......... 406 406Modernize child support program�������������������� ......... 244 310 251 269 303 356 362 252 226 226 1,377 2,799Extend the child welfare study ������������������������ ......... 2 4 ......... ......... ......... ......... ......... ......... ......... ......... 6 6Extend Transitional Medical Assistance 

(TMA)������������������������������������������������������������� ......... 240 415 10 ......... ......... ......... ......... ......... ......... ......... 665 665

Extend Qualified Individuals (QI) ������������������� ......... 495 ......... ......... ......... ......... ......... ......... ......... ......... ......... 495 495

Total, Health and Human Services��������������� 22 18,955 28,088 5,774 –3,471 –4,723 –5,440 –5,605 –5,933 –8,328 –12,788 44,623 6,529

Housing and Urban Development:

Provide funding for the Affordable Housing 

Trust Fund ���������������������������������������������������� ......... 10 140 290 230 190 100 20 20 ......... ......... 860 1,000

Interior:

Impose fee on nonproducing oil and gas leases ......... –25 –39 –59 –75 –90 –98 –109 –116 –125 –138 –288 –874Reserve funds for insular affairs assistance���� ......... 25 24 24 24 22 16 15 14 12 11 119 187Return to net receipts sharing for energy 

minerals��������������������������������������������������������� ......... ......... –44 –45 –47 –47 –48 –50 –53 –52 –55 –183 –441

Reform coal and hardrock Abandoned Mine 

Lands (AML) programs2 ������������������������������� ......... –138 –386 –330 –204 –129 –81 –128 –145 –100 –89 –1,187 –1,730

Impose hardrock mining royalty���������������������� ......... ......... –7 –5 –6 –6 –7 –10 –15 –19 –25 –24 –100Repeal Energy Policy Act fee prohibition and 

mandatory permit funds������������������������������� ......... ......... –20 –19 –18 ......... ......... ......... ......... ......... ......... –57 –57

Increase Duck Stamp fees2 ������������������������������� ......... –4 ......... ......... ......... ......... ......... ......... ......... ......... ......... –4 –4Reathorize Federal Land Sales/Acquisition 

Law (FLTFA)������������������������������������������������� ......... –3 –5 –8 –10 –4 ......... ......... ......... ......... ......... –30 –30
SUMMARY TABLES 45

Table S–9. MANDATORY AND RECEIPT PROPOSALS FROM 

THE FEBRUARY BUDGET—Continued

(Deficit increases (+) or decreases (–) in millions of dollars)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Totals

2012–

2016

2012–

2021

Repeal Geothermal Payments to Counties 

under 2005 Energy Policy Act���������������������� ......... –7 –7 –7 –7 –7 –7 –8 –8 –8 –8 –35 –74

Repeal “deep gas” royalty incentives���������������� ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........

Total, Interior ������������������������������������������������� ......... –152 –484 –449 –343 –261 –225 –290 –323 –292 –304 –1,689 –3,123

Justice:

Provide incentives for State medical 

malpractice reform���������������������������������������� ......... 100 50 50 50 ......... ......... ......... ......... ......... ......... 250 250

Labor:

Give States and employers short-term 

relief from interest and tax increases and strengthen unemployment insurance system solvency 2 ������������������������������������������� 1,220 3,544 4,051 –7,477 –12,863 –10,544 –11,813 –8,555 34 263 –167 –23,289 –43,527

Reform Federal Employees’ Compensation 

Act (FECA) ���������������������������������������������������� ......... –10 –13 –5 –7 –17 –26 –36 –46 –56 –67 –52 –283

Reauthorize Trade Adjustment Assistance ����� 124 415 713 893 825 746 708 696 710 736 778 3,592 7,220Protect pension benefits by empowering the 

PBGC Board to improve solvency ���������������� ......... ......... ......... –1,121 –2,523 –2,286 –2,141 –2,046 –1,987 –1,966 –2,001 –5,930 –16,071

Expand Foreign Labor Certification Fees�������� ......... –44 ......... ......... ......... ......... ......... ......... ......... ......... ......... –44 –44Expand work-sharing program2 ����������������������� ......... 36 17 –5 61 90 89 88 88 88 89 199 641Enhance unemployment insurance program 

integrity2,4 ������������������������������������������������������ ......... ......... –142 –261 –222 438 –316 195 219 –137 –330 –187 –556Total, Labor ���������������������������������������������������� 1,344 3,941 4,626 –7,976 –14,729 –11,573 –13,499 –9,658 –982 –1,072 –1,698 –25,711 –52,620

Treasury:

Levy payments to Medicare providers with 

delinquent tax debt2�������������������������������������� –17 –64 –68 –71 –74 –76 –76 –78 –80 –80 –81 –353 –748

Offset Federal tax refunds to collect State 

income taxes from debtors who currently reside in other States������������������������������������ ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........

Levy payments to Federal contractors with 

delinquent tax debt2�������������������������������������� –5 –59 –61 –64 –67 –69 –73 –76 –80 –83 –87 –320 –719

Restructure assistance to New York City2 ������� ......... 200 200 200 200 200 200 200 200 200 200 1,000 2,000

Total, Treasury����������������������������������������������� –22 77 71 65 59 55 51 46 40 37 32 327 533

Veterans Affairs:

Extend veterans income verification���������������� ......... 26 –7 –13 –20 –27 ......... ......... ......... ......... ......... –41 –41Extend VBA authority for use of HHS data ���� ......... 4 2 1 ......... –1 –2 –3 –4 –5 –5 6 –13Reform criteria for special monthly pension ��� ......... –6 –10 –13 –16 –20 –23 –27 –30 –34 –37 –65 –216Provide authority for vendee loan pooling������� ......... –86 –93 1 ......... ......... ......... ......... ......... ......... ......... –178 –178Expand eligibility for Vocational 

Rehabilitation and Employment on-the-job training program5 ����������������������������������������� ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........
46 MID-SESSION REVIEW

Table S–9. MANDATORY AND RECEIPT PROPOSALS FROM 

THE FEBRUARY BUDGET—Continued

(Deficit increases (+) or decreases (–) in millions of dollars)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Totals

2012–

2016

2012–

2021

Allow occupancy by a dependent child 

to satisfy VA home loans occupancy requirement��������������������������������������������������� ......... ......... 1 1 1 1 1 1 1 1 1 4 9Total, Veterans Affairs ����������������������������������� ......... –62 –107 –23 –35 –47 –24 –29 –33 –38 –41 –274 –439

Corps of Engineers:

Reform inland waterways funding2������������������ ......... ......... –196 –163 –135 –72 –72 –71 –69 –70 –69 –566 –917

Environmental Protection Agency:

Enact pesticide registration and 

premanufacture notice fees �������������������������� ......... –49 –81 –88 –95 –97 –101 –104 –107 –110 –114 –410 –946

Establish fees for use of hazardous waste 

electronic manifest system ��������������������������� ......... ......... ......... –6 –4 –3 –3 –3 –3 –3 –3 –13 –28Total, Environmental Protection Agency������ ......... –49 –81 –94 –99 –100 –104 –107 –110 –113 –117 –423 –974

Social Security Administration:

Require workers’ compensation information 

reporting4������������������������������������������������������� ......... 5 5 ......... ......... ......... ......... ......... ......... ......... ......... 10 10

Temporarily extend SSI benefits for refugees � ......... 86 92 ......... ......... ......... ......... ......... ......... ......... ......... 178 178Require States and localities to provide 

pension information4������������������������������������� ......... 13 20 18 –202 –439 –574 –609 –555 –522 –479 –590 –3,329

Revert to quarterly wage reporting4 ���������������� ......... 20 30 100 ......... ......... ......... ......... ......... ......... ......... 150 150Enact DI Work Incentives Simplification Pilot 

(non-PAYGO)������������������������������������������������� ......... 5 10 15 22 25 13 ......... ......... ......... ......... 77 90Total, Social Security Administration����������� ......... 129 157 133 –180 –414 –561 –609 –555 –522 –479 –175 –2,901

Other Independent Agencies:

Provide financial relief to the U.S. Postal 

Service ����������������������������������������������������������� 2,271 279 249 321 299 280 229 229 229 229 229 1,428 2,573

Federal Communications Commission (FCC):

Enact spectrum license user fee�������������������� –50 –200 –300 –425 –550 –550 –550 –550 –550 –550 –550 –2,025 –4,775Provide no new funding for the 

Telecommunications Development Fund�� –3 –7 –7 –7 –7 –7 –7 –7 –7 –7 –7 –35 –70

Subtotal, Federal Communications 

Commission (FCC)������������������������������ –53 –207 –307 –432 –557 –557 –557 –557 –557 –557 –557 –2,060 –4,845

Total, other independent agencies ���������������� 2,218 72 –58 –111 –258 –277 –328 –328 –328 –328 –328 –632 –2,272

Multi-Agency:

Enact Wireless Innovation and Infrastructure 

Initiative (WI3):Enact incentive auction authority and other 

spectrum reforms ��������������������������������������� ......... –1,900 –6,020 –8,240 –6,430 –2,460 –400 –1,300 –1,050 ......... ......... –25,050 –27,800

Build a Public Safety Broadband Network �� ......... 1,400 1,400 1,400 1,400 1,400 ......... ......... ......... ......... ......... 7,000 7,000Reserve the D Block for public safety use ���� ......... 3,150 ......... ......... ......... ......... ......... ......... ......... ......... ......... 3,150 3,150
SUMMARY TABLES 47

Table S–9. MANDATORY AND RECEIPT PROPOSALS FROM 

THE FEBRUARY BUDGET—Continued

(Deficit increases (+) or decreases (–) in millions of dollars)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Totals

2012–

2016

2012–

2021

Extend wireless broadband through the 

National Wireless Initiative and support Universal Service Fund reform����������������� ......... 2,500 1,250 1,250 ......... ......... ......... ......... ......... ......... ......... 5,000 5,000

Create a Wireless Innovation Fund �������������� ......... 409 587 681 627 539 123 34 ......... ......... ......... 2,843 3,000

Total, enact Wireless Innovation and 

Infrastructure Initiative (WI3) ����������

......... 5,559 –2,783 –4,909 –4,403 –521 –277 –1,266 –1,050 ......... ......... –7,057 –9,650

Implement program integrity allocation 

adjustments 2, 11���������������������������������������������� ......... –1,497 –4,187 –6,684 –9,465 –12,620 –14,990 –16,632 –18,305 –19,647 –20,976 –34,453–125,003

Provide $250 Economic Recovery Payments 2�� 14,616 265 ......... ......... ......... ......... ......... ......... ......... ......... ......... 265 265Hold harmless the Federal poverty level��������� ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........

Total, multi-agency ���������������������������������������� 14,616 4,327 –6,970 –11,593 –13,868 –13,141 –15,267 –17,898 –19,355 –19,647 –20,976 –41,245–134,388

Total, mandatory and receipt proposals, 

including surface transportation ........... 18,930 14,227 5,671 –2,579 –83,764–121,100 –76,118 –71,523 –58,081 –73,693 –76,882–187,545–543,842

Note: For receipt effects, positive figures indicate lower receipts. For outlay effects, positive figures indicate higher outlays. For net costs, positive figures indicate 

higher deficits.

1 The estimates for this proposal include effects on outlays. The outlay effects included in the totals above are listed below: 

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012– 2016 2012– 2021

Continue certain expiring provisions through 

calendar year 2012��������������������������������������������� 32 502 789 437 384 121 ......... ......... ......... ......... ......... 2,233 2,233

Expand earned income tax credit�������������������������� ......... ......... 69 1,372 1,384 1,404 1,436 1,463 1,490 1,512 1,551 4,229 11,681Expand child and dependent care tax credit�������� ......... ......... 337 347 354 363 372 386 398 410 420 1,401 3,387Provide for automatic enrollment in IRAs and 

double the tax credit for small employer plan startup costs ������������������������������������������������������� ......... ......... 38 66 71 79 90 105 122 142 167 254 880

Extend American opportunity tax credit�������������� ......... ......... 16 4,465 4,425 4,655 4,608 4,531 4,791 4,775 5,038 13,561 37,304Reform and extend Build America bonds ������������� 105 599 1,580 2,793 4,048 5,314 6,575 7,830 9,080 10,324 11,561 14,334 59,704Designate Growth Zones���������������������������������������� ......... 14 34 43 43 40 10 –20 –20 –17 –14 174 113

Total outlay effects of receipt proposals����������� 137 1,115 2,863 9,523 10,709 11,976 13,091 14,295 15,861 17,146 18,723 36,186 115,302

2 The estimates for this proposal include effects on receipts. The receipt effects included in the totals above are listed below:

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012– 2016 2012– 2021

Reform inland waterways funding������������������������ ......... ......... –196 –163 –135 –72 –72 –71 –69 –70 –69 –566 –917Reform coal and hardrock Abandoned Mine 

Lands (AML) programs ������������������������������������� ......... ......... –200 –200 –200 –200 –200 –200 –200 –200 –200 –800 –1,800

Increase Duck Stamp fees ������������������������������������� ......... –14 –14 –14 –14 –14 –14 –14 –14 –14 –14 –70 –140Give States and employers short-term relief from 

interest and tax increases and strengthen unemployment insurance system solvency ������ ......... 1,714 3,541 –7,477 –12,863 –10,544 –11,814 –8,555 34 263 –167 –25,629 –45,868

Expand work-sharing program ����������������������������� ......... ......... –14 –20 51 82 82 81 81 81 81 99 505
48 MID-SESSION REVIEW

Table S–9. MANDATORY AND RECEIPT PROPOSALS FROM 

THE FEBRUARY BUDGET—Continued

(Deficit increases (+) or decreases (–) in millions of dollars)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Totals

2012–

2016

2012–

2021

Enhance unemployment insurance integrity ������� ......... ......... –54 –108 –70 588 –162 355 388 42 –144 356 835Levy payments to Medicare providers with 

delinquent tax debt�������������������������������������������� –17 –64 –68 –71 –74 –76 –76 –78 –80 –80 –81 –353 –748

Levy payments to Federal contractors with 

delinquent tax debt�������������������������������������������� –5 –59 –61 –64 –67 –69 –73 –76 –80 –83 –87 –320 –719

Restructure assistance to New York City ������������� ......... 200 200 200 200 200 200 200 200 200 200 1,000 2,000Implement program integrity allocation 

adjustments�������������������������������������������������������� ......... –276 –804 –1,970 –3,721 –5,646 –7,227 –8,184 –8,773 –9,274 –9,778 –12,417 –55,653

Provide $250 Economic Recovery Payments �������� 216 112 ......... ......... ......... ......... ......... ......... ......... ......... ......... 112 112

Total receipt effects of mandatory proposals��� 194 1,613 2,330 –9,887 –16,893 –15,751 –19,356 –16,542 –8,513 –9,135 –10,259 –38,588–102,393

3 The health savings to offset the cost of providing physicians two years of relief from scheduled payment cuts under the sustainable growth rate formula (SGR) are 

listed below:

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012– 2016 2012– 2021

Expand CMS program integrity authority:

Reduce Medicaid provider tax threshold 

beginning in 2015������������������������������������������ ......... ......... ......... ......... –1,460 –2,050 –2,690 –2,820 –2,970 –3,110 –3,270 –3,510 –18,370

Strengthen Medicaid third-party liability������� ......... –65 –95 –155 –165 –170 –175 –190 –195 –200 –210 –650 –1,620Track high prescribers and utilizers of 

prescription drugs in Medicaid �������������������� ......... –80 –170 –310 –340 –370 –390 –410 –440 –460 –480 –1,270 –3,450

Require manufacturers that improperly 

report items for Medicaid drug coverage to fully repay States������������������������������������������ ......... –10 –10 –10 –10 –10 –15 –15 –15 –15 –15 –50 –125

Enforce Medicaid drug rebate agreements������ ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........Increase penalties on drug manufacturers for 

fraudulent non-compliance with Medicaid drug rebate agreements�������������������������������� ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........

Require drugs to be properly listed with the 

FDA to receive Medicaid coverage ��������������� ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........

Prohibit Federal funds from being used 

as Medicaid/CHIP State share unless specifically authorized by law ���������������������� ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........

Recover erroneous payments made to 

insurers participating in Medicare Advantage ����������������������������������������������������� ......... –490 –570 –600 –640 –650 –680 –680 –660 –610 –580 –2,950 –6,160

Increase scrutiny of providers using higherrisk banking arrangements to receive 

Medicare payments��������������������������������������� ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........

Allow civil monetary penalties for providers 

who do not update enrollment information� ......... ......... ......... –10 –10 –10 –10 –10 –10 –10 –10 –30 –80

Study the feasibility of using universal 

product numbers (UPNs) to improve payment accuracy in Medicare��������������������� ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........
SUMMARY TABLES 49

Table S–9. MANDATORY AND RECEIPT PROPOSALS FROM 

THE FEBRUARY BUDGET—Continued

(Deficit increases (+) or decreases (–) in millions of dollars)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Totals

2012–

2016

2012–

2021

Permit exclusion of individuals affiliated with 

entities sanctioned for fraudulent or other prohibited actions from federal health care programs�������������������������������������������������������� ......... ......... ......... ......... ......... ......... –10 –10 –10 –10 –10 ......... –50

Create a system to validate physicians’ and 

practitioners’ orders for certain high-risk products and services������������������������������������ ......... ......... ......... –20 –110 –200 –250 –260 –280 –310 –330 –330 –1,760

Require prepayment review for all power 

wheelchairs���������������������������������������������������� ......... –10 –20 –20 –20 –20 –30 –30 –30 –30 –30 –90 –240

Use a portion of Recovery Audit Contractor 

recoveries to implement actions that prevent improper payments and fraud�������� ......... ......... ......... ......... –20 –30 –30 –30 –40 –40 –40 –80 –230

Provide flexibility to the Secretary in 

implementing predictive analytics technologies for claims payment to maximize cost effectiveness�������������������������� ......... ......... –20 –20 –20 –30 –10 ......... ......... ......... ......... –100 –100

Limit the discharge of debt in bankruptcy 

proceedings in cases of fraudulent activity � ......... ......... ......... –10 –10 –20 –20 –20 –20 –20 –30 –40 –150

Strengthen penalties for illegal distribution 

of Medicare, Medicaid, or CHIP beneficiary identification or billing privileges ���������������� ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........Total, expand CMS program integrity 

authority����������������������������������������������������� ......... –655 –885 –1,155 –2,805 –3,560 –4,310 –4,475 –4,670 –4,815 –5,005 –9,060 –32,335

Other Medicaid Proposals:

Limit Medicaid reimbursement of durable 

medical equipment (DME) based on Medicare rates����������������������������������������������� ......... –210 –420 –470 –550 –700 –730 –770 –810 –850 –890 –2,350 –6,400

Rebase Medicaid Disproportionate Share 

Hospital (DSH) allotments in 2021�������������� ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... –4,170 ......... –4,170Total, other Medicaid proposals �������������������� ......... –210 –420 –470 –550 –700 –730 –770 –810 –850 –5,060 –2,350 –10,570

Other Medicare Proposals:

Require the Secretary to determine the 

geographic scope of Quality Improvement Organization (QIO) contracts to maximize efficiency�������������������������������������������������������� ......... –20 –50 –110 –190 –230 –260 –290 –320 –360 –390 –600 –2,220

Eliminate the conflict of interest between 

beneficiary protection and quality improvement activities for QIOs������������������ ......... –10 –20 –30 –60 –80 –80 –90 –100 –120 –120 –200 –710

Expand pool of contractors eligible for QIO 

work��������������������������������������������������������������� ......... ......... ......... –10 –20 –20 –20 –30 –20 –20 –30 –50 –170

Extend the QIO contract length from three 

years up to five years ������������������������������������ ......... ......... ......... ......... –10 –20 –20 –20 –30 –30 –30 –30 –160

Align QIO contract terminations with Federal 

Acquisition Regulations�������������������������������� ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........
50 MID-SESSION REVIEW

Table S–9. MANDATORY AND RECEIPT PROPOSALS FROM 

THE FEBRUARY BUDGET—Continued

(Deficit increases (+) or decreases (–) in millions of dollars)

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Totals

2012–

2016

2012–

2021

Dedicate EHR penalties to improving 

Medicare program financing ������������������������ ......... ......... ......... ......... ......... ......... ......... ......... ......... –1,620 –1,610 ......... –3,230Total, other Medicare proposals �������������������� ......... –30 –70 –150 –280 –350 –380 –430 –470 –2,150 –2,180 –880 –6,490

Other Pharmaceutical Proposals:

Modify length of exclusivity to facilitate faster 

development of generic biologics ������������������ ......... ......... ......... ......... –80 –250 –300 –340 –420 –460 –490 –330 –2,340

Prohibit brand and generic drug companies 

from delaying the availability of new generic drugs������������������������������������������������� ......... –540 –590 –680 –760 –850 –910 –960 –1,070 –1,180 –1,250 –3,420 –8,790

Streamline pharmacy benefit contracting in 

the FEHB program ��������������������������������������� ......... –69 –138 –147 –160 –171 –184 –200 –216 –231 –251 –685 –1,767Total, other pharmaceutical proposals���������� ......... –609 –728 –827 –1,000 –1,271 –1,394 –1,500 –1,706 –1,871 –1,991 –4,435 –12,897

Interactions ������������������������������������������������������������ ......... –67 –72 –74 –124 –175 –32 138 381 12 72 –512 59

Total savings from CMS program 

integrity, and other Medicare, Medicaid, and pharmaceutical proposals ...................................................... ......... –1,571 –2,175 –2,676 –4,759 –6,056 –6,846 –7,037 –7,275 –9,674 –14,164 –17,237 –62,233

Cost of providing SGR relief through 2013������ ......... 18,602 28,593 7,210 ......... ......... ......... ......... ......... ......... ......... 54,405 54,405Additional savings after paying for SGR relief 

through 2013 ������������������������������������������������� ......... 17,031 26,418 4,534 –4,759 –6,056 –6,846 –7,037 –7,275 –9,674 –14,164 37,168 –7,828

4 This proposal has both PAYGO and non-PAYGO effects.5 This proposal has outlays of less than $500,000 per year. The total cost is $1 million from 2012–2016 and $3 million from 2012–2021.6 This proposal was enacted in the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 (P.L. 112–9).7 Portions of this proposal were enacted in the Department of Defense and Full-Year Continuing Appropriations Act (P.L. 112–10) and the Budget Control Act of 

2011 (P.L. 112–25).

8 This proposal was enacted in the Budget Control Act of 2011 (P.L. 112–25).9 This proposal was enacted in the Department of Defense and Full-Year Continuing Appropriations Act (P.L. 112–10).10 The proposal to provide permanent SGR relief is presented in the adjusted baseline for the Mid-Session Review. The Administration is committed to working with 

the Congress to achieve fiscally responsible SGR reform in the context of the Administration’s deficit reduction proposals.

11 The portions of the proposal that affect SSA and CMS were enacted in the Budget Control Act of 2011 (P.L. 112–25).
SUMMARY TABLES 51

Table S–10. OUTLAYS FOR MANDATORY PROGRAMS UNDER CURRENT LAW 1,2

(In billions of dollars)

2010

Actual

Estimate

2011 2012 2013 2014 2015 2016

Human resources programs:

Education, training, employment and social services ����������������������������������������������������� –7 –13 7 10 2 2 5Health �������������������������������������������������������������������������������������������������������������������������������� 304 314 307 323 417 484 537Medicare ���������������������������������������������������������������������������������������������������������������������������� 446 484 466 503 531 556 605Income security ����������������������������������������������������������������������������������������������������������������� 553 536 480 467 432 435 447Social Security ������������������������������������������������������������������������������������������������������������������� 701 726 768 813 859 908 960Veterans’ benefits and services ���������������������������������������������������������������������������������������� 57 75 69 77 83 89 101

Subtotal, human resources programs ������������������������������������������������������������������������� 2,054 2,120 2,098 2,193 2,324 2,474 2,655

Other mandatory programs:

National defense ��������������������������������������������������������������������������������������������������������������� 5 8 8 7 7 7 7International affairs ��������������������������������������������������������������������������������������������������������� -* –3 –3 –1 –1 –1 –1Energy ������������������������������������������������������������������������������������������������������������������������������� 1 –1 3 2 3 1 –1Agriculture ������������������������������������������������������������������������������������������������������������������������ 15 14 11 18 15 15 14Commerce and housing credit ������������������������������������������������������������������������������������������ –89 –10 24 –22 –28 –22 –15Transportation ������������������������������������������������������������������������������������������������������������������ 2 2 3 3 2 2 2Community and regional development ���������������������������������������������������������������������������� 1 –2 1 1 -* -* -*Justice �������������������������������������������������������������������������������������������������������������������������������� 2 3 7 6 5 4 5General government ��������������������������������������������������������������������������������������������������������� 4 9 8 5 5 5 5Undistributed offsetting receipts ������������������������������������������������������������������������������������� –82 –87 –98 –94 –97 –101 –102Other functions ����������������������������������������������������������������������������������������������������������������� 1 2 3 4 4 3 4

Subtotal, other mandatory programs �������������������������������������������������������������������������� –141 –64 –32 –71 –85 –87 –82

Total, outlays for mandatory programs under current law ������������������������������������ 1,913 2,056 2,066 2,122 2,239 2,387 2,573

*$500 million or less.1 This table meets the requirements of Section 221(b) of the Legislative Reorganization Act of 1970.2 Estimates are based on the Budget Enforcement Act (BEA) baseline. The BEA baseline differs in some instances from current law (see the chapter on “Current 

Services Estimates” in the Analytical Perspectives volume of the 2012 Budget) and also from the adjusted baseline (see Table S–7).
52 MID-SESSION REVIEW

Table S–11. FUNDING LEVELS FOR APPROPRIATED 

(“DISCRETIONARY”) PROGRAMS BY CATEGORY

(Budget authority in billions of dollars)

2010

Actual

2011

Enacted

Discretionary Caps Enacted in the Budget Control Act of 2011 Totals

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2012- 2016 2012- 2021

Discretionary Categories: 1

Security Category �������������������������������������� 684.4 688.1 684.0 686.0 698.0 711.0 725.0 741.0 757.0 774.0 791.0 808.0 3,504.0 7,375.0Non-Security Category ����������������������������� 400.4 371.0 359.0 361.0 368.0 375.0 382.0 390.0 399.0 408.0 417.0 426.0 1,845.0 3,885.0

Subtotal, Discretionary Category .......... 1,084.8 1,059.1 1,043.0 1,047.0 1,066.0 1,086.0 1,107.0 1,131.0 1,156.0 1,182.0 1,208.0 1,234.0 5,349.0 11,260.0Cap Adjustments: 2

Overseas Contingency Operations 3 ���������� 162.6 159.4 126.5 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 326.5 576.5Program Integrity Adjustments 4 �������������� 0.5 0.5 0.9 1.1 1.3 1.5 1.6 1.7 1.7 1.8 1.8 1.8 6.2 15.1

Subtotal, Cap Adjustments ...................... 163.1 159.9 127.4 51.1 51.3 51.5 51.6 51.7 51.7 51.8 51.8 51.8 332.8 591.6Other 2010 and 2011 Supplemental/

Emergency Discretionary Funding (not included above) ������������������������������������������ 9.6 –1.3

Grand Total, Discretionary Budget 

Authority ................................................. 1,257.6 1,217.7 1,170.4 1,098.1 1,117.3 1,137.5 1,158.6 1,182.7 1,207.7 1,233.8 1,259.8 1,285.8 5,681.8 11,851.6

Memorandum, Budget Authority Adjusted for Inflation and Population: 5

Security ������������������������������������������������������ 913.2 873.2 810.5 715.2 706.1 697.2 689.3 682.3 675.4 669.0 662.5 655.8 3,618.3 6,963.2Non-Security ��������������������������������������������� 427.3 381.6 359.9 351.8 348.6 344.9 341.1 337.9 335.4 332.7 329.9 327.0 1,746.3 3,409.1Grand Total ����������������������������������������������� 1,340.5 1,254.9 1,170.4 1,067.0 1,054.6 1,042.2 1,030.4 1,020.1 1,010.8 1,001.7 992.3 982.7 5,364.6 10,372.3

1 P.L. 112–25, the Budget Control Act of 2011 (BCA), established discretionary caps for 2012–2021. The caps included separate categories for “security” and “nonsecurity” programs for 2012 and 2013 only with security defined as the Departments of Defense, Homeland Security, and Veterans Affairs, the National Nuclear Security 

Administration, the Intelligence Community Management Account, and budget function 150 for International Affairs. For purposes of this presentation, the security and non-security categories are increased after 2013 based on the growth in the overall discretionary category but do not reflect specific policy decisions.

2 The adjustments displayed do not include disaster relief pursuant to section 251(b)(2)(D) of the BCA as OMB is in the process of developing its estimate of the 10-

year average calculation at the time the MSR is being printed. OMB's estimate of the maximum adjustment for 2012 will be transmitted to the Congress when OMB submits its report in compliance with section 251(b)(2)(D)(ii) of the BCA.

3 The 2012 Budget includes placeholder estimates of $50 billion per year for Overseas Contingency Operations in 2013 and beyond.  These estimates do not reflect 

any specific policy decisions.

4 The 2012–2021 levels reflect the maximum cap adjustment permitted each year under the BCA for Continuing Disability Reviews (CDRs) and Redeterminations 

and for Health Care Fraud and Abuse Control (HCFAC). The 2010 and 2011 levels reflect only the adjustment for CDRs and Redeterminations because the applicable adjustment for HCFAC became the enforcement base under the BCA.

5 Totals include Overseas Contingency Operations and Other Supplemental/Emergency Funding.
SUMMARY TABLES 53

Table S–12. FEDERAL GOVERNMENT FINANCING AND DEBT

(In billions of dollars)

Actual

2010

Estimate

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Financing:

Unified budget deficit ���������������������������������������������������������������������������������� 1,293 1,316 956 648 473 521 583 501 467 498 540 568Other transactions affecting borrowing from the public:

Changes in financial assets and liabilities: 1

Change in Treasury operating cash balance ������������������������������������� 35 –200 ......... ......... ......... ......... ......... ......... ......... ......... ......... .........Net disbursements of credit financing accounts:

Direct loan accounts ����������������������������������������������������������������������� 179 110 126 173 148 138 124 107 101 96 94 96Guaranteed loan accounts �������������������������������������������������������������� 2 13 –6 –3 3 6 6 4 –1 –5 –6 –15Troubled Asset Relief Program (TARP) equity purchase 

accounts ��������������������������������������������������������������������������������������� –29 5 –31 2 1 –1 –1 –4 –4 –6 –7 *

Net purchases of non-Federal securities by the National Railroad 

Retirement Investment Trust (NRRIT) ����������������������������������������� 1 2 –1 –1 –1 –1 –1 –1 –1 –1 –1 –1

Net change in other financial assets and liabilities 2 ������������������������ –7 ......... ......... ......... ......... ......... ......... ......... ......... ......... ......... .........

Subtotal, changes in financial assets and liabilities ��������������������� 181 –70 87 171 151 142 127 105 95 84 80 81

Seigniorage on coins ������������������������������������������������������������������������������ –* –* –* –* –* –* –* –* –* –* –* –*

Total, other transactions affecting borrowing from the public ����� 181 –71 87 171 150 141 127 105 94 83 79 80

Total, requirement to borrow from the public (equals 

change in debt held by the public) ������������������������������������� 1,474 1,245 1,043 818 623 662 710 606 562 581 619 649

Changes in Debt Subject to Statutory Limitation:

Change in debt held by the public �������������������������������������������������������������� 1,474 1,245 1,043 818 623 662 710 606 562 581 619 649Change in debt held by Government accounts ������������������������������������������ 179 144 133 167 178 207 225 253 280 275 270 257Change in other factors ������������������������������������������������������������������������������ 5 1 1 2 1 1 2 2 2 2 2 2

Total, change in debt subject to statutory limitation ��������������������������� 1,658 1,390 1,178 987 803 869 937 861 843 858 891 908

Debt Subject to Statutory Limitation, End of Year:

Debt issued by Treasury ����������������������������������������������������������������������������� 13,503 14,891 16,067 17,053 17,855 18,723 19,659 20,519 21,361 22,219 23,110 24,018Adjustment for discount, premium, and coverage 3 ����������������������������������� 8 10 11 13 14 15 16 17 18 18 18 18

Total, debt subject to statutory limitation4 ��������������������������������������� 13,511 14,901 16,079 17,066 17,869 18,738 19,675 20,536 21,379 22,237 23,128 24,036

Debt Outstanding, End of Year:

Gross Federal debt: 5

Debt issued by Treasury ������������������������������������������������������������������������ 13,503 14,891 16,067 17,053 17,855 18,723 19,659 20,519 21,361 22,219 23,110 24,018Debt issued by other agencies ��������������������������������������������������������������� 26 27 27 27 27 27 26 25 23 22 20 18

Total, gross Federal debt �������������������������������������������������������������������� 13,529 14,918 16,095 17,080 17,882 18,750 19,685 20,544 21,385 22,241 23,130 24,036
54 MID-SESSION REVIEW

Table S–12. FEDERAL GOVERNMENT FINANCING AND DEBT—Continued

(In billions of dollars)

Actual

2010

Estimate

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Held by:

Debt held by Government accounts ������������������������������������������������������ 4,510 4,654 4,787 4,954 5,133 5,339 5,564 5,817 6,097 6,372 6,641 6,898Debt held by the public 6 ������������������������������������������������������������������������ 9,019 10,264 11,307 12,126 12,749 13,411 14,121 14,726 15,288 15,869 16,489 17,137

Debt Held by the Public Net of Financial Assets:

Debt held by the public ������������������������������������������������������������������������������� 9,019 10,264 11,307 12,126 12,749 13,411 14,121 14,726 15,288 15,869 16,489 17,137Less financial assets net of liabilities:

Treasury operating cash balance ���������������������������������������������������������� 310 110 110 110 110 110 110 110 110 110 110 110Credit financing account balances:

Direct loan accounts ��������������������������������������������������������������������������� 668 778 904 1,077 1,225 1,363 1,486 1,593 1,694 1,790 1,884 1,980Guaranteed loan accounts ������������������������������������������������������������������ –32 –20 –26 –28 –25 –19 –13 –9 –10 –15 –21 –36TARP equity purchase accounts �������������������������������������������������������� 77 82 51 52 53 52 50 46 42 35 28 29

Government-sponsored enterprise preferred stock ������������������������������ 109 124 145 153 153 153 153 153 153 153 153 153Non-Federal securities held by NRRIT ������������������������������������������������� 23 24 23 22 21 20 19 18 17 16 14 13Other assets net of liabilities ���������������������������������������������������������������� –29 –29 –29 –29 –29 –29 –29 –29 –29 –29 –29 –29

Total, financial assets net of liabilities ���������������������������������������������� 1,125 1,069 1,177 1,357 1,507 1,649 1,776 1,881 1,976 2,059 2,139 2,219

Debt held by the public net of financial assets ������������������������������ 7,894 9,194 10,130 10,769 11,242 11,762 12,345 12,845 13,312 13,810 14,350 14,918

* $500 million or less.1 A decrease in the Treasury operating cash balance (which is an asset) is a means of financing a deficit and therefore has a negative sign; that is, the reduction in cash 

balances reduces the amount that would otherwise be borrowed from the public. An increase in checks outstanding (which is a liability) is also a means of financing a deficit and therefore also has a negative sign.

2 Includes checks outstanding, accrued interest payable on Treasury debt, uninvested deposit fund balances, allocations of special drawing rights, and other liability 

accounts; and, as an offset, cash and monetary assets (other than the Treasury operating cash balance), other asset accounts, and profit on sale of gold.

3 Consists mainly of debt issued by the Federal Financing Bank (which is not subject to limit), debt held by the Federal Financing Bank, the unamortized discount (less 

premium) on public issues of Treasury notes and bonds (other than zero-coupon bonds), and the unrealized discount on Government account series securities.

4 The statutory debt limit is $14,694 billion, as increased on August 2, 2011. Under current law, the limit is scheduled to increase to $15,194 billion on or around 

September 21, 2011.

5 Treasury securities held by the public and zero-coupon bonds held by Government accounts are almost all measured at sales price plus amortized discount or less 

amortized premium. Agency debt securities are almost all measured at face value. Treasury securities in the Government account series are otherwise measured at face value less unrealized discount (if any).

6 At the end of 2010, the Federal Reserve Banks held $811.7 billion of Federal securities and the rest of the public held $8,207.2 billion. Debt held by the Federal 

Reserve Banks is not estimated for future years.

EXECUTIVE OFFICE OF THE PRESIDENT

OFFICE OF MANAGEMENT AND BUDGET

WASHINGTON, D.C.