CBO On Defense

The Congressional Budget Office posted a blog entry this morning on a report it released yesterday, called "The Budget and Economic Outlook: Fiscal Years 2013 to 2023."

The report predicts that "the federal deficit will drop to $845 billion in 2013 -- its smallest size since 2008. Even so, under current law annual deficits and federal debt will stay at historically high levels relative to the economy through 2023, and lawmakers face key budgetary decisions this year that could have a substantial effect on that budget outlook," the blog post states, adding that on defense:

By CBO's estimate, budgetary resources for defense (other than spending for military personnel) will be cut by around 8 percent across the board, and nondefense funding that is subject to the automatic reductions will be cut by between 5 percent and 6 percent. According to that estimate, discretionary outlays will drop by $35 billion and mandatory spending will be reduced by $9 billion this year as a direct result of those procedures; additional reductions in outlays attributable to the cuts in 2013 funding will occur in later years. The deficit for 2013 will depend in part on whether those cuts are allowed to take place, are canceled (in whole or in part), or are replaced with other measures designed to reduce the deficit.

If lawmakers chose to prevent those automatic cuts each year without making other changes that reduced spending by offsetting amounts, the deficit would total nearly $900 billion in 2013, more than $40 billion higher than under current law. Over the 2014-2023 period, total deficits would exceed $8 trillion -- over $1 trillion more than is projected in CBO's current baseline.