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Economy in Brief

U.S. Budget Deficit Deeper The Last Two Months
by Tom Moeller April 13, 2006

During March, the U.S. federal government again posted a deeper budget deficit versus the same month last year. The deficit of $85.5B versus last March's deficit of $71.2B pulled the FY06 to date budget deficit of $303.0B deeper versus 294.6B during the first six months of FY05.

Net revenues surged 45.8% m/m, made up for most of the February collapse and rose 10.5% during the first six months of this fiscal year versus FY05. The rate of gain in individual income tax receipts (44% of total receipts), however, slowed to 8.5% y/y though the gain in corporate income taxes (10% of total receipts) remained strong at 30.5% during fiscal year 06's first six months.

The improved job market raised employment taxes (36% of total receipts) 7.2% y/y and estate & gift taxes surged by 16.2% y/y.

U.S. net outlays jumped during March by 13.7% versus last March and the growth in FYTD outlays rose to 8.7%, the highest in nearly three years. Defense spending (19% of total outlays) surged 16.1% y/y and for the first six months of FY06 rose 8.9% from '05. The growth in Medicare spending (12% of total outlays) also jumped to 46.0% y/y and lifted FYTD growth to 15.5% while spending on social security (21% of total outlays) remained strong at 5.7%.

US Government Finance Mar Feb Y/Y FY 2005 FY 2004 FY 2003
Budget Balance $-85.5B $-119.2B $-71.2B (3/05) $-318.3B $-412.7B $-377.6B
  Net Revenues $164.6B $112.9B 10.6% 14.5% 5.5% -3.8%
  Net Outlays $250.0B $232.1B 13.7% 7.8% 6.2% 7.4%
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