Economic Effects of Reducing the Fiscal Restraint That Is Scheduled to Occur in 2013
Policymakers are facing difficult trade-offs in formulating the nation’s fiscal policies. On the one hand, if the fiscal policies currently in place are continued in coming years, the revenues collected by the federal government will fall far short of federal spending, putting the budget on an unsustainable path. On the other hand, immediate spending cuts or tax increases would represent an added drag on the weak economic expansion.
CBO Analyzes Effects of Fiscal Restraint Scheduled Under Current Law
Policymakers face difficult trade-offs in deciding how quickly to implement policies to reduce budget deficits. On the one hand, cutting spending or increasing taxes slowly would lead to a greater accumulation of government debt; on the other hand, immediate spending cuts or tax increases would represent an added drag on the weak economic expansion.
CBO Estimate of the Statutory Pay-As-You-Go Effects for Senate Amendment 2122 in the Nature of a Substitute to S. 3187, the Food and Drug Administration Safety and Innovation Act
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