President Releases His FY 2016 Budget

Feb 2, 2015 | Budgets & Projections

Today, President Obama released his FY 2016 budget, outlining his priorities for FY 2016 and the coming decade. Later today, we'll publish a full analysis. Be sure to stay tuned to CRFB and The Bottom Line throughout the day and throughout the week as we take a closer look at all aspects of the President’s budget. Below are the highlights.

The President's budget would reduce medium-term deficit and debt levels relative to current projections, and slightly reduce them relative to current levels. Under the budget, deficits would remain around 2.5 percent of GDP for the rest of the ten-year window. Debt would rise from 74 percent of GDP today to a post-World War II record of nearly 75 percent in 2016 before declining to 73 percent by 2025.

The budget puts debt on a stable – and actually on a very modest downward – path compared to baseline scenarios where debt continues to rise. However, debt would still remain near its post-war record high levels. 

*PAYGO baseline assumes continuation of current law, including inflation adjustments of the 2021 post-sequester discretionary levels, along with a drawdown in war spending as in the President’s budget.

Both spending and revenues would grow over time under the budget. Specifically, spending would grow from 21.3 percent of GDP in 2016 to 22.2 percent in 2025. Revenues, meanwhile, would rise from 18.7 percent in 2016 to 19.7 percent in 2025. The growth in spending and revenues is the result both of existing features in the budget and tax code as well as new policies put forward by the President

The Key Numbers in the President's Budget

                    2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Ten-Year
Revenues
$ (trillions) $3.18 $3.53 $3.76 $3.94 $4.14 $4.33 $4.53 $4.75 $4.99 $5.24 $5.48 $44.66
% of GDP 17.7% 18.7% 19.1% 19.1% 19.2% 19.3% 19.3% 19.4% 19.5% 19.6% 19.7%  19.3%
Outlays
$ (trillions) $3.76 $4.0 $4.22 $4.42 $4.65 $4.89 $5.13 $5.37 $5.62 $5.88 $6.17 $48.71
% of GDP 20.9% 21.3% 21.4% 21.5% 21.6% 21.7% 21.9% 21.9% 22.0% 22.0% 22.2% 21.7%
Deficits
$ (billions) $583 $474 $463 $479 $518 $554 $600 $626 $635 $639 $687 $5,674
% of GDP 3.2% 2.5% 2.3% 2.3% 2.4% 2.5% 2.6% 2.6% 2.5% 2.4% 2.4% 2.5%
Public debt
$ (trillions) $13.51 $14.11 $14.71 $15.32 $15.96 $16.64 $17.35 $18.09 $18.83 $19.58 $20.37 N/A
% of GDP 75.1% 75.0% 74.6% 74.3% 74.1% 74.0% 74.0% 73.9% 73.7% 73.5% 73.3% N/A

Later today, we'll publish a full analysis of the President’s FY 2016 Budget. All our blogs this week on the President's Budget will be collected here. See posts on past administration budgets here.