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The federal deficit is on track to its lowest level as a percentage of the economy since 2007, and the economy is stronger than expected.

That's the good news from the non-partisan Congressional Budget Office's new economic outlook released Monday. "Economic activity will expand at a solid pace in 2015 and over the next few years – reducing the amount of underused resources, or 'slack,' in the economy," the report said.

There is, though, the perennial bad news: huge deficits in later years, driven primarily by an aging population supported by fewer working age Americans. By 2025, the federal deficit will reach $1.1 trillion.

The forecast of expected revenues and outlays is used by Congress as it shapes its spending bills for the year that starts Oct. 1.

The report also found that the economy is stronger now than the CBO had expected it would be in its recent forecasts, but that it would be not as strong later in the 10-year forecast window than it predicted earlier. Unemployment, currently at 5.6 percent, is expected to fall to 5.3 percent by late summer of 2017.

The CBO also found that implementing the Affordable Care Act will not be as expensive as it originally predicted when the law was passed in 2010. Instead of costing $710 billion through 2019, the complex law will only cost $571 billion through its first decade.

CBO Director Doug Elmendorf attributed the lower cost partly to the 2012 Supreme Court decision ruling that states did not have to participate in the law's expansion of Medicaid. But Elmendorf said much of the savings comes from lower health insurance costs and lower health insurance premiums over the past several years.

Elmendorf also said the CBO would follow the House's instructions to include "dynamic scoring" in its analyses of some legislation, but would not offer a personal assessment of the idea. "We don't have a position about whether the House rule is a good idea or not," he said.

Many Republicans, particularly conservatives, have pushed for dynamic scoring of tax cut bills, because they believe such "macroeconomic" analyses would show that legislation would cost the Treasury less than traditional scoring methods show, or would even show that tax cuts actually increase tax revenue.

"We think it's natural for members of Congress to be interested in the macroeconomic consequences of major pieces of legislation. That's why CBO has, for many years, built models to estimate those macroeconomic consequences," Elmendorf said, adding that CBO reports on House legislation would now build that methodology into the final number, rather than providing it in a supplementary report. "It's up to the Congress to decide the format in which it wants to receive our analysis."

Obamacare

CBO

Three Republican presidential hopefuls declined Sunday night to insult some of the Republican party's biggest donors.

Sens. Rand Paul of Kentucky, Marco Rubio of Florida and Ted Cruz of Texas, asked by debate moderator Jonathan Karl of ABC News if billionaires now have too much influence in both major parties, agreed that it wasn't a problem. They all said no, if not exactly for the same reasons.

The senators spoke at a semi-annual gathering of billionaires David and Charles Koch's donor network, which underwrites a powerful array of secretly funded political groups. As the GOP presidential competition accelerates, the network is giving signals that it might get involved in presidential primaries for the first time.

Cruz brought up Democratic Sen. Harry Reid's harsh attacks on the Koch brothers in Senate floor speeches last year. Reid, then the majority leader, had called the brothers "un-American." Cruz said Reid's speeches were "grotesque and offensive." As audience members applauded, Cruz said the Kochs "have stood up for free enterprise principles and endured vilification with equanimity and grace."

Paul called for additional limits on lobbying by government contractors; he didn't say if that also would cover government employee unions. His conclusion: "I haven't met one person since I've been here or as I travel around the country who's come up to me saying, 'Oh, I want a contract.' They simply want to be left alone. So I don't fault anybody for that."

Rubio said political spending "is a form of political speech protected under the Constitution," and echoed Paul's view of big donors: "I don't know a single person in this room who's ever been to my office... asking from government any special access. By and large what they want is to be left alone."

The question of political influence came at the end of a freewheeling debate. Paul supported the administration's decision to lift the Cuban trade embargo; Cruz and Rubio, who fiercely oppose the Castro regime, said the embargo should stay. There was a similar split on Middle East policy: Paul advocated diplomacy, while Rubio and Cruz took more aggressive stands. They all said the economy either isn't recovering or is recovering despite Obama administration policies. And they all ranked the income gap as a crucial issue for the Republican agenda.

The forum capped an active weekend of campaigning by GOP presidential hopefuls, none of whom has officially declared. Former Florida Gov. Jeb Bush gave a major speech. A platoon of possible candidates addressed a conference in Iowa, where the first presidential balloting will take place next January. Cruz was the only potential candidate to speak in Iowa and at the Koch event in Palm Springs, Calif.

Freedom Partners Chamber of Commerce, a hub of the Koch network, webcast the debate to news organizations – a break from the tight security that kept reporters away from previous Koch gatherings.

2016 Republican presidential nomination

Koch Brothers

The federal budget deficit will fall in 2015, the sixth consecutive year of decreases relative to the overall economy, according to new figures by the Congressional Budget Office. The office also says the U.S. economy will expand at a "solid pace" over the next few years.

The estimate for 2015 stands at $468 billion, a modest improvement on the 2014 budget deficit of $483 billion. Both numbers are solid improvements over the $680 billion shortfall that was recorded in 2013.

But as is often the case with economic news, the picture isn't completely sunny. The main problem is the overall federal debt, which the nonpartisan CBO notes is already at historically high levels when measured against the U.S. economy.

From the budget agency:

"CBO expects that federal debt held by the public will amount to 74 percent of GDP at the end of this fiscal year — more than twice what it was at the end of 2007 and higher than in any year since 1950 (see figure below). By 2025, in CBO's baseline projections, federal debt rises to nearly 79 percent of GDP."

As you'll recall, U.S. debt levels soared in the early years of the economic crisis, as the government spent money to try to cope with the crisis even as revenues plummeted. In 2009, for instance, the budget deficit stood at 9.8 percent of the U.S. GDP; this year, it's projected to be 2.6 percent.

While the next few years could be relatively smooth for the U.S. economy, the CBO says several elements will challenge the budget over the next 10 years:

"The aging of the population, the rising costs of health care, and the expansion in federal subsidies for health insurance that is now under way will substantially boost federal spending on Social Security and the government's major health care programs relative to GDP over the next 10 years."

federal deficit

federal budget deficit

Whether it was the $85,000 personal submarine craft, the telepathic obstacle course or the yeti yard ornaments we could never quite afford, in-flight catalog SkyMall — and the kitschy items sold inside its pages — is going to be hard to forget.

The Two-Way

Goodbye, Garden Yeti: In-Flight Catalog SkyMall Files For Bankruptcy

Media

From A Frequent Flier To SkyMall, Thanks For The Memory Foams

On Friday, SkyMall's parent company filed for bankruptcy protection and announced that its assets would go up for auction in late March. So in preparation for the catalog's possible disappearance from our seatback pockets, we asked people how they'd remember SkyMall. Some of you wrote heartfelt testimonials. A few made it into this post, but there were many more. Here's a sampling:

SkyMall's write-on map inspired an entire math education program in New Mexico, as Martha Riecks explains:

"While on a flight to an education conference in 2003, Scott Laidlaw, a middle school math teacher, opened up a Skymall Catalog and saw the 'World's Largest Write On Map.' He immediately envisioned his students trading merchandise while exploring the world in the 1600s.

"When the map arrived, it took up his entire classroom when spread out, and was soon covered with over 3,000 sticky notes. Students made small wooden ships, learning ratios and proportions as they enacted the spice trade. For six more years, Laidlaw developed and implemented new semester-long historical fiction math games."

Laurie Harari of Delray Beach, Fla., considers SkyMall items such as the doggy stairs aspirational:

"SkyMall has kept me going on my journey to get a real job someday. Since I was a small girl, I envisioned one day graduating from college, making a lot of money at my job, and having a really really tall bed. Beside that tall bed, I would have those doggy stairs that SkyMall sold in its catalog."

This blogger may be partial to the garden yeti, but a lot of you professed your love of the zombie yard ornament (seen above). Medical school student Mehwish Farooqi wrote:

"I am disappointed that someday after medical school and my eventual pay off of my student loans, I will no longer have the opportunity to purchase a zombie yard ornament such as this. It was something to look forward to."

SkyMall's demise also is a financial hit for those vendors whose wares are featured in the catalog, as Car-Dek President Joe Volpe shares:

"We are one of the suppliers that is going to take a big financial hit by this bankruptcy. Our product, the Petdek, was sold by [SkyMall] as the "All in one carrier" for carrying pets and cargo in the back seat of vehicles. It was one of the most successful products they have ever sold and were averaging over 130 a month for retail sales of $165,000 last year. We manufacture in the US so quite a few people are going to be affected by this. Luckily we have many other vendors for our product, but this loss caught us completely off guard as they kept telling me they were financially solvent."

SkyMall art by Kevin and Miles Taylor. Kevin and Miles Taylor hide caption

itoggle caption Kevin and Miles Taylor

And what happens to all the in-flight guerrilla art projects that SkyMall inspired? Miles Taylor of Austin, Texas, explains:

SkyMall inspired a running guerilla art project. Miles and Kevin Taylor hide caption

itoggle caption Miles and Kevin Taylor

"We would take SkyMall magazine (which I remind you is 'yours to keep') and we would alter the images using various markets and pens. After filling the magazine with our little gags, we would take pictures on our phones and return the magazines to the seat pockets in front of us. Did any of you every come across our altered SkyMall magazines on your flights?"

Not to by outdone, Paul Madore of St. Paul, Minn., sent in a poem with stanzas full of actual SkyMall items available for purchase. This is called "Poem #18: Random Crap":

A grill cleaning robot

video screen microscopes,

a "Snow Joe" brand snow broom

with handle that telescopes,

An electric blue corkscrew,

personalized wine stopper,

a "Sheng Kwong" metal gong,

an old-time corn popper,

An illuminated zipline,

a poole-themed clock (quartz),

a paper towel rac

housing four USB ports,

talking Smurf toothbrushes

a king crab-shaped chair,

remote-controlled shark balloon

that inflates with air,

All these and more

you can greedily eyeball

while flying in comfort,

please enjoy "SkyMall"

skymall catalog

sold

skymall items

skymall

magazines