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Economy in Brief

March/April Calendar Quirk, Big Refunds Raise March Budget Deficit.  Year-to-Date Down $45 Billion
by Carol Stone April 11, 2007

The U.S. federal government ran a deficit of $96.3B during March, well ahead of last March's $85.3B and also larger than consensus forecasts of $89B.

This performance brought the fiscal-year-to-date deficit to $258.4B, down from $302.9B through March last year.

Summary data for the monthly budget, reported in the Monthly Treasury Statement, are available Haver's USECON database. Details are carried in the GOVFIN database.

The excess of the monthly deficit over the forecast amount may result from the acceleration into March of April payments for veterans' benefits, supplemental security income and some Medicare outlays; these are ordinarily paid on the first day of each month, but are moved forward when the First falls on a weekend. April outlays will be commensurately reduced. Additionally, individual income tax refunds reached a record for a single month, $55.5B. The previous records were $52.4B in April 2004 and $52.2B in March last year. This is possibly due to earlier filing by taxpayers, and April and May refunds could turn out to be somewhat smaller.

In total, net revenues were $166.5B in March, up just 1.2% from March 2006; for the fiscal-year-to-date, they were 8.0% above the comparable period of fiscal 2006. Individual income tax receipts were $35.4B in March, down 9.8% from March 2006, but fiscal 2007-to-date saw $479.2B, up 10.8%. Corporate income taxes were $40.2B, a record for March and up 11.8% from a year ago. Social insurance taxes were $76.5B in the month, up 6.2% from a year ago.

The U.S. Government's net outlays grew 5.2% from March 2006, reaching $262.8B, with the cumulative total for the first six fiscal months up 2.9%. Defense outlays were $52.0B in the month, up 2.4% on the year earlier. Social security outlays (benefits and administrative costs) were $48.9B, up 5.9%. Net interest turned somewhat higher, reaching $21.1B, up 8.8% on March a year ago, while smaller amounts in previous months put the total for the fiscal year so far up only 2.5%.

This report gives an inconclusive read on the state of the budget, since key tax payments are going on this month and the timing of other tax filing seems to be changing from year to year. Major outlay patterns are also erratic from month to month. Nonetheless, overall, revenues are continuing to grow faster than outlays and the budget deficit is continuing to diminish.

US Government Budget, Bil.$ Mar 2007 Feb 2007 Oct 2006
 Mar 2007
Oct 2005
 Mar 2006
FY 2006 FY 2005 FY 2004
Budget Balance -96.3 -120.0 -258.4 -302.9 -248.2 -318.7 -411.1
Net Revenues 166.5 120.3 1120.9 1037.6 11.8% 14.6% 5.4%
8.0% 10.5%
Net Outlays 262.8 240.3 1379.3 1340.6 7.4% 7.9% 6.2%
2.9% 8.7%
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