Director Rob Portman

February 5, 2007

0
 Balancing the Budget
Deficit in billions of dollars (Deficit as a percent of GDP)
300

250 244 239

1.8% 1.6%
200 187
1.2%
150

100 94
0.6%
54
50
0.3%
0
-61
-0.3%
-50

-100
2007 2008 2009 2010 2011 2012
1
 Steady Economic Growth Continues
Percentage real GDP growth, calendar year
5
4.4

4 3.9 ------------- Projections --------------

3.7
3.4
3.2 3.1
3.0 3.0 3.0 2.9
3
2.7
2.5

2
1.6

1 0.8

0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
3
 Receipts Return to Historical Average
Receipts as a percent of GDP
25

2006
18.4%
20

15
40-Year Historical Average 18.3%

10
1980 1984 1988 1992 1996 2000 2004 2008 2012
4
Mandatory Spending is Overwhelming
the Rest of the Budget

1962 2006
6% 9%
38%
68% 26%
53%

Discretionary Interest Mandatory

6
 Current Trends Are Not Sustainable
Percent of GDP
40
Mandatory Net Interest Discretionary Total Revenues
Spending

30

20

10

0
70

80

90

00

10

20

30

40

50

60

70

80
19

19

19

20

20

20

20

20

20

20

20

20
7
 Past Reconciliation Savings
5-Year Mandatory Savings as a Percent of Mandatory Baseline

3.0%
2.8%

2.5%

2.0%
2.0%
1.7%
1.5%
1.1%
1.0%

0.5%

0.0%
OBRA 1990 OBRA 1993 BBA 1997 Proposed
8