Committee for a Responsible Federal Budget
CRFB Realistic Baseline Assumptions
In our Realistic Baseline, we make a set of “current policy” assumptions that we feel are morelikely to occur than those underlying current law projections. These include the extension of the2001/2003 tax cuts, the continued enactment of patches to the Alternative Minimum Tax toprevent it from hitting middle-class taxpayers, the averting of a 27 percent cut in Medicarephysician payments (the “doc fix”), the repeal of the automatic sequester, and the drawdown ofthe war in Afghanistan.
Fig. 2: Assumptions Made in CBO Scenarios and the CRFB Realistic Baseline
Budget Area Extended BaselineAlternative FiscalScenarioCRFB RealisticAssumptions hrough 2022Revenue
All temporary taxprovisions expire asscheduledAll temporary provisionsare extended2001/2003 tax cuts andAMT patches areextended; tax extendersexpire as scheduled
Spending levels are asspecified by the BudgetControl Act caps,including the sequesterSpending levels are asspecified by the BudgetControl Act caps,excluding the sequesterSpending levels are asspecified by the BudgetControl Act caps,excluding the sequester
27% cut in physicianpayments as scheduled;sequester takes effectPermanent freeze toMedicare physicianpayments; sequester isrepealedPermanent freeze toMedicare physicianpayments; sequester isrepealed
Grows as scheduled;sequester takes effectGenerally grows asscheduled; sequester isrepealedGenerally grows asscheduled; sequester isrepealed
Grows with inflation Grows with inflation Spending is drawn down
Assumptions After 2022Revenue
Grows as scheduledunder current lawFrozen as a share ofGDP at 2022 levelsGrows assumingcontinuation of thecurrent tax code
Frozen as a share ofGDP at 2022 levels,including sequesterIncreased to historicalaverage as a share ofGDP by 2027; frozenthereafterFrozen as a share ofGDP at 2022 levels,excluding sequester
ACA cost controls fullyeffective through 2029ACA cost controlsdiscontinued after 2022ACA cost controlspartially continuedthrough 2029
Generally frozen as ashare of GDP at 2022levels*Increased to historicalaverage as a share ofGDP by 2027; frozenthereafterFrozen as a share ofGDP at 2022 levels
For information and projections for CRFB’s Realistic Baseline through 2022, seehttp://crfb.org/crfbs-realistic-baseline.