IB10102 - The Budget for Fiscal Year 2003
22-Nov-2002; Philip D. Winters; 19 p.
Update: April 10, 2003
MOST RECENT DEVELOPMENTS
The President?s February 2003 and CBO?s January and March 2003 budget reports (for fiscal year (FY) 2004) reflected the continued deterioration in the budget outlook for FY2003. The Administration?s FY2004 budget raised the estimated FY2003 deficit to $304 billion (or $264 billion without policy changes). The estimate did not include costs of the war with Iraq. CBO?s March baseline had an FY2003 deficit of $246 under current policies, meaning no tax cuts, no spending increases, no costs associated with a war with Iraq. CBO?s analysis of the President?s proposals produced a deficit of $287 billion in FY2003.
Congress adopted, on February 3, 2003, the eighth and final short-term continuing resolution (CR) on appropriations (P.L.108-5; February 7, 2003), providing funding (mostly at FY2002 levels) for federal activities not otherwise funded, through February 20, 2003. A resolution providing funding for the 11 remaining appropriations (H.J.Res. 2) was adopted by Congress on February 13, 2003 and was signed into law (P.L.108-7) by the President on February 20.
The President proposed (March 24, 2003) a $75 billion supplemental appropriations for FY2003 to fund military activities in Iraq and for homeland security. The House (H.R. 1559) and Senate (S. 762) adopted modified supplemental legislation on March 3 and March 7 respectively. Both raised the amount provided in the supplemental to close to $80 billion.
Abstract: The Budget for Fiscal Year 2003 Congress adopted the Consolidated Appropriations Resolution for fiscal year (FY) 2003 (CAR2003; H.J.Res. 2) on February 13, 2003. The legislation funded the 11 remaining regular appropriations (out of 13; two were adopted in October 2002, Defense and Military Construction) for the remainder of the fiscal year. The President signed the resolution into law (P.L. 108-7) on February 20. This followed the adoption of eight continuing resolutions on appropriations (CRs) that funded those activities not covered by regular appropriations.
The President proposed a $75 billion supplemental appropriations to pay for the war in Iraq and for additional homeland security funding on March 24. The legislation, after changes, passed the House and Senate on April 3 and 7 respectively. Congress is working to complete action on the legislation on or before April 11.
The Administration?s FY2004 budget (February 2003) proposal, put the FY2003 deficit at $304 billion, up from the $80 billion in the Administration?s original FY2003 proposals. The Congressional Budget Office?s (CBO) January 2003 budget report had an FY2003 baseline deficit of $199 billion.
The President released his original FY- 2003 budget proposals on February 4, 2002, shortly after the release of the CBO annual budget report. The budget balance without the effect of the President?s proposals (the baseline), showed a small surplus ($41 billion) from the Administration and a small deficit ($14 billion) from CBO.
The President?s FY2003 budget proposed tax cuts and spending increases to stimulate the economy, rapid increases in defense and homeland security spending, and little growth in other areas of discretionary spending.
In early March 2002, CBO released reestimates of the President?s policy proposals using CBO?s economic and technical assumptions. The CBO estimates of the Administration?s policy proposals produced a deficit of $121 billion for FY2003.
The Bush Administration?s early 2002 economic stimulus proposal was superseded by stimulus legislation adopted by Congress on March 7, 2002 (The Job Creation and Worker Assistance Act of 2002; H.R. 3090, P.L. 107-147), that would increase the then estimated deficit (from baseline levels) by $43 billion in FY2003.
The House Budget Committee adopted its version of the FY2003 budget resolution, H.Con.Res. 353, on March 13, 2002. The House passed the resolution on March 20. The resolution contained a deficit of $46 billion for the year. Like the President?s budget the resolution focused on funding the war on terrorism and for homeland security.
The Senate Budget Committee reported its version of the FY2003 budget resolution (S.Con.Res. 100) on March 22. Its provisions for defense and homeland security were similar to (but not the same as) those in the House resolution and the President?s budget. The Senate never considered the budget resolution.
The deficit expected now for FY2003, $250 billion to $305 billion, resulted from a combination of a weak economy, changes in underlying technical components of the budget, the government?s budgetary response to the terrorist attacks in the fall of 2002, the tax cut adopted in June 2001. [read report]