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Economy in Brief

U.S. Budget Deficit Deeper
by Tom Moeller June 13, 2006

In May, the U.S. federal government ran a budget deficit of $42.8B that was slightly deeper than the deficit during the same month last year. The FY06 to-date budget deficit nevertheless narrowed to $227.0B versus a deficit of $272.3B during the first eight months of FY05.

Growth in net revenues FYTD versus the first eight months of FY05 improved to 12.9%. Individual income tax receipts (44% of total receipts) rose 13.6% FYTD as withheld taxes rose 7.5% and non-withheld taxes surged 21.6%. Corporate income taxes (10% of total receipts) similarly were strong and jumped 25.6% y/y during FY06's first eight months.

The improved job market lifted employment taxes (36% of total receipts) 7.5% y/y and estate & gift taxes surged another 15.7% y/y.

U.S. net outlays rose 8.0% FYTD versus '05. Defense spending (19% of total outlays) rose 7.0% during the first eight months of FY06 versus '05.Medicare spending (12% of total outlays) surged 12.2% while spending on social security (21% of total outlays) remained strong at 5.8%.

Presidential Approval Ratings: How Low Can Bush Go? from the American Enterprise Institute (AEI) can be found here.

US Government Finance May April Y/Y FY 2005 FY 2004 FY 2003
Budget Balance $-42.8B $118.9B $-35.4B (5/05) $-318.3B $-412.7B $-377.6B
  Net Revenues $192.7B $315.1B 26.1% 14.5% 5.5% -3.8%
  Net Outlays $235.5B $196.2B 25.2% 7.8% 6.2% 7.4%
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