But, as CBO highlights in its latest report, such forecasts are subject to considerable error. Indeed, as recently as last winter, when fiscal 1997 was already well under way, both CBO and OMB were still overestimating that year’s deficit by more than $ billion.
In the case of CBO, about two-thirds of the error was in receipts, including nearly $ billion more tax receipts than would have been expected based on the actual behavior of income as measured in the national income and product accounts. This overage helped lift the receipts share of GDP to an historical high.