Perhaps the first aspect to clarify is that projections are not forecasts. A forecast is the best guess today of the outcome of some future event. These two questions are quite different. For example, it is clear that, faced with projected surpluses, the President and Congress will not leave current expenditure and tax revenue programs unchanged. Both houses of Congress have already passed large tax cuts that would reduce the projected surpluses if signed into law.
Expenditures also are likely to rise.
As a result, the actual surplus the federal government will have in the future will be significantly below the levels currently being projected. If the government raises spending enough, or cuts taxes enough, the budget might turn out to be balanced in future years and no actual surplus will ever occur. In fact, the Clinton administration's budget report shows a zero surplus for future years by assuming all extra funds will be set aside pending Social Security and Medicare reforms. This won't mean the projections were wrong, it is just that the projections are based on current policies, and the projections will cause those very policies to be changed in ways that alter the budget. Because projections are based on current policies as well as forecasts about economic development, three factors lead to revisions.