Measuring the Effects of the Business Cycle on the Federal Budget, June 2009: “In March 2009, the Congressional Budget Office (CBO) released its most recent baseline projections of federal revenues, outlays, and budget balances for the next 10 years. Those projections are developed in a process by which CBO assumes the continuation of current laws and policies that affect taxes and mandatory spending programs and extrapolates the growth of discretionary spending by using projected rates of inflation. According to CBO’s projections, under current tax and spending policies, the budget deficit would increase from $459 billion in 2008 to $1.7 trillion in 2009 and then fall to $1.1 trillion in 2010 and to $693 billion in 2011. Measured relative to the size of the economy—that is, as a percentage of gross domestic product, or GDP—the deficit would be 11.9 percent of GDP in 2009 (the largest in more than half a century), 7.9 percent in 2010, and4.6 percent in 2011.”