July 11, 2007
Balancing the Budget
Deficit in billions of dollars Deficit as a percent of GDP
4.0%
413 3.6%
Actuals Projections
318 2.6%
3.0%
2.0%
248 1.9%
205 1.5%
258 1.8%
213 1.4%
40-Year Average 2.4%
123 0.8%
1.0%
89 0.5%
0.0%
-0.2% -33
-1.0% 2004 2005 2006 2007 2008 2009 2010 2011 2012
Budget Deficit Since 1940
Deficit/Surplus as a percent of GDP
10
Sept. 11th
0
Tax Relief Fully Implemented
2007
-10
40-Year Average = -2.4%
-20
2007 Projection = -1.5%
-30
World War II
-40
1940 1950 1960 1970 1980 1990 2000 2010
2
Solid Economy = Growing Receipts
Percent change in receipts 20
Projections
15 10
5
0
-5 -10
1982 1986 1990 1994 1998 2002 2006 2010
3
Note: Shaded areas indicate recessions.
Receipts as a Percent of GDP
Percent of GDP
25
MSR Forecast
20
2007 Forecast 18.8%
15
40-Year Historical Average 18.3%
10 1980 1984 1988 1992 1996 2000 2004 2008 2012
President's Budget vs. Congress' Budget
Non-Defense Discretionary Spending
Budget authority in billions
500
President's Budget
Congress' Budget
480
Congress wants to spend $205 billion more than the President's Budget.
460
440
420
400 2007
Enacted
2008
2009
2010
2011
2012
5
Mandatory Spending is Overwhelming the Rest of the Budget
1962
6% 68% 26% 53% 39%
2007
8%
Discretionary
Interest
Mandatory
6
Unsustainable Growth in Entitlements
Percent of GDP
40
Entitlements Net Interest Discretionary Spending Total Revenues
30
20
10
0
1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080
7