Federal Debt Held by the
Public, Historically and August 2012 http://go.usa.gov/7QYAs Projected in CBO’s Baseline and Under anAlternative Fiscal Scenario(Percentage of GDP)140 Actual Projected120100 Alternative Fiscal Scenario 80 60 CBO’s Baseline Projection 40 20 0 1940 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020If current laws governing taxes and spending remain in effect (CBO’s baseline projection), debt held by the public will fall from73 percent of GDP in fiscal year 2012 to 58 percent of GDP in 2022. If policymakers altered those laws to maintain many policies thathave been in effect in recent years (CBO’s alternative fiscal scenario), debt would climb to 90 percent of GDP by 2022. In either case, C ONGRESSIONALdebt would be relatively high by historical standards. B UDGET O FFICE

Congressional Budget Office An Update
to the Budget and Economic Outlook: Fiscal Years 2012 to 2022 August 2012 The Budget Outlook

Def i cits Projected in
CBO’s Baseline and August 2012 http://go.usa.gov/7QYUnder an Alternative Fiscal Scenario(Percentage of GDP) 8 7 6 5 Additional Debt Service 4 Prevent Spending Cuts 3 Extend Tax Policies 2 1 Baseline 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022Deficits under CBO’s current-law baseline projection average about 1 percent of GDP over the 2013–2022 period. By comparison, underan alternative scenario, in which some changes specified in current law would not occur and many tax and spending policies that havebeen in effect in recent years would continue instead, deficits over that period would average about 5 percent of GDP. C ONGRESSIONAL B UDGET O FFICE

Total Discretionary Budget Authority Excluding
War August 2012 http://go.usa.gov/7QYFunding, Disaster Relief, and Program Integrity Initiatives(Percentage of GDP) 12 Actual Projected 10 Historical Funding and CBO’s Baseline 8 Funding for 2012 Adjusted for Inflation 6 4 Excluding Enforcement Procedures 2 0 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022The caps on discretionary spending—either with the required automatic reductions (as in CBO’s baseline) or without them (as in thealternative fiscal scenario)—will necessitate a reduction in the real resources available for many government programs, compared withthe funding provided for 2012. If, instead, funding was allowed to grow at the rate of inflation, it would be 17 percent higher in 2022 C ONGRESSIONALthan the amounts projected in the baseline. B UDGET O FFICE

Congressional Budget Office An Update
to the Budget and Economic Outlook: Fiscal Years 2012 to 2022 August 2012 The Economic Outlook

Federal Debt Held byProductReal Gross
Domestic the Public, Historically and January 2012 August 2012 http://go.usa.gov/7QY http://go.usa.gov/nPiAs Projected in CBO’s Baseline and Under an(Percentage change, fourth quarter to fourth quarter)Alternative Fiscal Scenario(Percentage of GDP) 4 Recession 3.9 Recession 2.9 2.9 3 2.8 2.4 2.4 First 2.2 Half 2 1.9 2.0 1.7 1 0.4 0 -0.1 -1 -2 -3 -3.3 -4 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012Witheconomydeficits anticipated for much of the 10-year projection period of CBO’s GDP rose at an average annual rate the1.7 percent inThe modest has continued to expand modestly this year. Real (inflation-adjusted) current-law baseline, debt held by of publicthe first half of the year, of GDP. However, than in 2011 changes specified in current law did not occur and certain current policiesrecedes as a percentage somewhat slower if some of theand less than its average rate during the previous expansion. CBO anticipateswerethe pace of instead, debt held by will increase slightly during percent of GDP by the end of 2022, the highest figure since justthat continued economic expansion the public would rise to 94 the rest of 2012. C ONGRESSIONAL B UDGET O FFICEafter World War II.

Real Business Fixed Investment August
2012 http://go.usa.gov/7QY(Percentage change from same quarter of previous year) 20 12.5 11.0 10 10.2 0 -10 -9.5 -20 -20.1 -30 2000 2002 2004 2006 2008 2010 2012Business investment has grown rapidly over the past year. Real (inflation-adjusted) business fixed investment—in structures,equipment, and software—grew by 10.2 percent over the year that ended in the second quarter of 2012. Despite that growth, the totalamount of net investment (fixed investment minus depreciation) as a fraction of GDP remains unusually low. C ONGRESSIONAL B UDGET O FFICE

Housing Market Indicators August 2012
http://go.usa.gov/7QY(Percentage change from same quarter of previous year) 20 10.7 House Prices 10 2.2 0 Real Residential Investment -10 -20 -30 2000 2002 2004 2006 2008 2010 2012A recovery in the housing market appears to be under way. Real (inflation-adjusted) residential investment—spending on homeconstruction and improvements, mobile homes, and brokers’ commissions—was almost 11 percent higher in the second quarter of 2012than in the same quarter last year. House prices seem to have reached their bottom and have been rising in 2012. C ONGRESSIONAL B UDGET O FFICE

Economic Growth in the United
States and August 2012 http://go.usa.gov/7QYAmong Its Leading Trading Partners(Percentage change from same quarter of previous year) 6 Actual Projected 4 Leading Trading Partners 2 United States 0 -2 -4 -6 2000 2005 2010 2015 2020Economic growth among the nation’s leading trading partners, which peaked in mid-2010, has continued to slow, while the U.S.economy has continued to grow at a modest pace since mid-2011. That different pattern of growth is a primary factor behind CBOsforecast of weaker net exports in the second half of 2012. (Actual data include the July 2012 revisions to the national income and C ONGRESSIONAL B UDGET O FFICEproduct accounts; projected data do not.)

Long-Term Unemployment August 2012 http://go.usa.gov/7QY(Percent)
50 Recession Recession First 43.8 Half 43.3 42.2 40 31.5 30 22.1 21.8 20 19.6 19.7 18.4 17.6 17.6 11.4 11.8 10 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012The share of unemployment accounted for by the long-term unemployed—people who have been seeking work for more than26 consecutive weeks—has topped 40 percent for the past two and a half years. By comparison, that share was about22 percent in 2003, in the aftermath of the 2001 recession. C ONGRESSIONAL B UDGET O FFICE

Inf l ation August 2012
http://go.usa.gov/7QY(Percentage change in prices from same quarter of previous year) 5 4 Overall 3 2 Core 1 0 -1 2000 2002 2004 2006 2008 2010 2012Inflationary pressures remain subdued: The average rate of inflation in consumer prices during the year ending in thesecond quarter of 2012 was less than 2 percent. C ONGRESSIONAL B UDGET O FFICE

Unemployment Rate August 2012 http://go.usa.gov/7QY(Percent)
12 Actual Projected 9.9 2009, 4Q 10 9.1 2013, 4Q CBO’s 8 8.2 Baseline 2012, 2Q Projection 5.8 2003, 4Q 8.0 6 2013, 4Q Alternative Fiscal Scenario 4 4.4 3.9 2006, 4Q 2000, 4Q 2 0 2000 2005 2010 2015 2020Because of the sharp deficit reduction that will occur under current law, CBO projects that the unemployment rate will rise to about 9 percent inthe fourth quarter of 2013. Under an alternative scenario, in which some changes specified in current law would not occur and many tax andspending policies that have been in effect in recent years would continue instead, unemployment would remain near 8 percent in 2013. C ONGRESSIONAL B UDGET O FFICE

GDP and Potential GDP August
2012 http://go.usa.gov/7QY( Trillions of 2005 dollars) 20 Actual Projected 18 16 Potential GDP 14 GDP 12 10 0 2000 2005 2010 2015 2020CBO expects that real (inflation-adjusted) GDP will stay below the economy’s potential—a level that corresponds to a high rate of useof labor and capital—until 2018. Potential GDP is projected to grow at an average annual rate of 2.4 percent between 2018 and 2022and by an average of 2.2 percent for the 2012–2022 projection period. (Actual data include the July 2012 revisions to the national C ONGRESSIONAL B UDGET O FFICEincome and product accounts; projected data do not.)

Labor Income August 2012 http://go.usa.gov/7QY(Percentage
of gross domestic income) 65 Actual Projected 64 63 Average, 1980 to 2011 62 (61.9%) 61 60 59 0 1980 1985 1990 1995 2000 2005 2010 2015 2020Since the end of the recession, labor income has fallen as a share of gross domestic income—the sum of all income earned in theproduction of GDP—reinforcing its downward trend since 1980. In CBO’s projections, labor income grows faster over the next decade,bringing its share to about 61 percent by 2022, just below the historical average since 1980. (Actual data include the July 2012 revisions C ONGRESSIONAL B UDGET O FFICEto the national income and product accounts; projected data do not.)