The Effects of Recent Legislation on the Economy and the Budget
January 7, 2022
Presentation at the American Economic Association Annual Meeting
Phillip L. Swagel
Director
For more information about the meeting, see https://tinyurl.com/bderdaww.
Effects of Pandemic-Related Legislation From March and
April 2020 on the Deficit and on GDP, Fiscal Years 2020 to 2023
Cumulative Effect on | |||
Effect on the Deficit | Cumulative Effect on GDP | GDP per Dollar of Effect | |
Policy | (Billions of dollars) | (Billions of dollars) | on the Deficit (Dollars) |
Paycheck Protection Program | |||
and Related Provisions | 628 | 226 | 0.36 |
Enhanced Unemployment | |||
Compensation | 442 | 297 | 0.67 |
Recovery Rebates for | |||
Individuals | 292 | 175 | 0.60 |
Direct Assistance for State and | |||
Local Governments | 150 | 132 | 0.88 |
Other Spending Provisions | 700 | 548 | 0.78 |
Other Revenue Provisions | 425 | 157 | 0.37 |
Total | --- | --- | -- |
2,637 | 1,535 | 0.58 | |
See Congressional Budget Office, The Effects of Pandemic-RelatedLegislation on Output (September 2020), Table 3, www.cbo.gov/publication/56537. GDP = gross domestic product.
Likely Range of the Effects of Pandemic-Related Legislation From March and April 2020 on Real GDP
CBO's likely range is
intended to cover roughly the middle two-thirds of the outcomes after accounting for uncertainty about how much changes in federal spending and revenues affect overall demand and how much changes in overall demand affect output in the short term.
See Congressional Budget Office, The Effects of Pandemic-RelatedLegislation on Output (September 2020), Figure 1, www.cbo.gov/publication/56537. GDP = gross domestic product.
Net Increase in the Deficit From Major Pandemic-Related Legislation (Enacted and Considered)
The effects on the deficit were much larger in 2020 and 2021 than they will be from 2022 to 2030, CBO estimates.
CARES = Coronavirus Aid, Relief, and Economic Security Act; CAA = Consolidated Appropriations Act; ARPA = American Rescue Plan Act. a. Changes in federal deficits, excluding debt service, from legislative changes. See www.cbo.gov/publication/56517, Table A-1.
b. Changes in federal deficits, excluding debt service, from legislative changes. See www.cbo.gov/publication/56970, Table 1-6. c. Changes in federal deficits, excluding debt service, from legislative changes. See www.cbo.gov/publication/57263, Table A-1.
- Seewww.cbo.gov/publication/57406.
- Seewww.cbo.gov/publication/57627.
Net Increase in the Deficit From the Build Back Better Act, as Passed and With Modifications
CBO estimates that the deficit would increase by $3.0 trillion from 2022 to 2031 under modifications to the Build Back Better Act that would make various policies permanent rather than temporary (as specified by Senator Lindsey Graham and Congressman Jason Smith).
By comparison, the deficit would increase by
$0.2 trillion over that period under the version of the bill passed by the House of Representatives.
See Congressional Budget Office, "Year-by-Year Projections" (supplemental material for a letter to the Honorable Lindsey Graham and the Honorable Jason Smith regarding the
budgetary effects of making specified policies in the Build Back Better Act permanent, December 10, 2021), www.cbo.gov/publication/57673.
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CBO - Congressional Budget Office published this content on 07 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 January 2022 21:57:07 UTC.