3043 , S. 1710 ), which the President vetoed, and Defense bill ( H.R. 2764 ) that incorporated 10 remaining regular appropriations bills into the State-Foreign Operations appropriations bill and a fourth continuing resolution ( H.J.Res. 72 ). On December 26, the President signed the omnibus measure, entitled the Consolidated Appropriations Act of FY2008 ( P.L. 110-161 ), which provided $555 billion in discretionary budget authority. The CBO baseline showed a FY2012 surplus of $170 billion and a projected $249 billion surplus in FY2017. Outlays would be much higher were these war costs included in projections. The conference announced an agreement on May 16, which the House and Senate adopted ( H.Rept. By mid-July, the House and Senate Committees on Appropriations had approved most of the 12 regular appropriations bills. At the end of FY2007, the House had passed all 12 appropriations bills and the Senate had passed four. The Senate passed three more appropriations bills in October. During the last week of FY2007, Congress passed a continuing resolution (H.J. Res 52) to fund government operations until November 16, which the President signed on September 29 ( P.L. On November 8, Congress approved the Labor-HHS-Education bill ( H.R. 3222 , P.L. 110-116 ), which he signed. On December 19, Congress passed an omnibus appropriations bill ( H.R. By FY2012, according to Administration projections, defense spending will drop to $546 billion. The House Budget Committee reported its version of the FY2008 budget resolution ( H.Con.Res. Figure 2 shows four alternative paths for outlays as a percentage of GDP through FY2017:
the President's FY2008 budget proposal (February 2007), the President's revised proposal ( Mid-Session Review , July 2007), an alternative outlook derived from CBO data (March 2007), and the March 2007 CBO reestimate of the President's original FY2008 proposals. The Administration's proposals included extending the current relief from the alternative minimum tax (AMT) for FY2007 and FY2008. The conference agreement ( H.Rept. On the revenue side, the baseline assumes the lack of a fix to the expanding coverage of the AMT and, as required by current law, the expiration of the 2001 and 2003 tax cuts at the end of calendar year 2010. Deficits in Congressional Budget Legislation

The House- and Senate-passed budget resolutions included FY2008 deficits similar to the deficit in the President's budget (see Table 5 ). 110-153 ) had a deficit of $252 billion in FY2008, becoming a surplus of $41 billion in FY2012. Comparing Projections of Federal Deficits and Surpluses

The President's policy proposals assumed additional spending for defense in FY2007 and FY2008, tight controls on domestic discretionary spending, a slight slowing in the growth of Medicare and Medicaid spending, no additional AMT relief after FY2008, and the creation of personal accounts for Social Security in FY2012. The current structure of the Federal Government's major entitlement programs will place a growing and unsustainable burden on the budget in the long-term.... By 2050, spending on these three entitlement programs [Social Security, Medicare, and Medicaid] is projected to be more than 15 percent of GDP, or more than twice as large as spending on all other programs combined, excluding interest on the public debt. The retirement of the baby boom generation, which will rapidly expand the population eligible for federal programs serving the elderly, along with continuing increase in health care costs will put enormous pressure on the federal budget.
On February 5, 2007, President Bush presented his fiscal year (FY) 2008 budget to Congress. The President's budget predicted a deficit of $239 billion for FY2008 and a steady improvement of the federal government's fiscal position, including a surplus of $61 billion in FY2012, the last year projected. Major proposals included large defense supplementals for FY2007 and FY2008, extensions of the expiring tax cuts, limited increases in domestic discretionary spending, and limited increases in defense spending after FY2008. The Administration also proposed a temporary halt to the expanding reach of the Alternative Minimum Tax (AMT) in FY2007 and FY2008. Medicare and Medicaid were expected to grow more slowly. The Administration's July 2007 Mid-Session Review showed little change in the budget outlook for FY2008 through FY2012, although higher health outlays and war costs increased the expected FY2008 deficit slightly.
The FY2008 budget also discussed long-term fiscal problems. According to the longer-term projections from the Administration, the Congressional Budget Office (CBO), and the Government Accountability Office (GAO), the impending retirement of the baby boom generation and rising health care costs will substantially expand spending over the coming decades on federal programs serving the elderly, such as Medicare, Social Security, and Medicaid. The long-term growth of outlays, if left unchanged or if not offset by new revenues, could overwhelm the government's ability to finance its obligations.
In January 2007, the CBO released baseline projections of future budget outcomes under current law. CBO projected a FY2008 deficit of $98 billion, a $170 billion surplus in FY2012, and a $249 billion surplus in FY2017. The baseline assumes the large tax cuts enacted in the first half of the decade expire as scheduled, real discretionary spending is fixed, and the Alternative Minimum Tax is unchanged.
The House and Senate adopted separate versions of the FY2008 budget resolution in March 2007, which would allow more domestic spending than the Administration request and extend some expiring tax cuts with conditions. The House and Senate adopted a conference agreement (H.Rept. 110-153) on May 17, with a projected FY2008 deficit of $252 billion. By mid-July, the House and Senate Committees on Appropriations had approved most of the 12 regular appropriations bills. At the end of FY2007, the House had passed all 12 appropriations bills and the Senate had passed four. The Senate passed three more appropriations bills in October. The President had said he would veto other appropriations bills. At the end of FY2007, Congress passed the first (H.J.Res. 52) of four continuing resolutions (H.R. 3222, H.J.Res. 69, H.J.Res. 72), which in sequence, funded government operations until the end of the calendar year. On November 8, Congress approved the Labor-HHS-Education bill (H.R. 3043, S. 1710), which the President vetoed, and Defense bill (H.R. 3222, P.L. 110-116), which he signed. On December 19, Congress passed an omnibus bill (H.R. 2764) that incorporated the 11 remaining regular appropriations bills. On December 26, the President signed the Consolidated Appropriations Act of FY2008 (P.L. 110-161), which provided $555 billion in discretionary budget authority. This report will not be updated.