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Economy in Brief

U.S. Budget Deficit Is Reduced By Spending Restraint
by Tom Moeller  March 12, 2012

During February, the Federal Government ran a budget deficit of $231.7B, according to figures released by the U.S. Treasury and the Office of Management and Budget. So far this fiscal year, the deficit totaled $580.8B, down from $641.3B during the first five months of FY'11. As a percent of GDP the deficit is running slightly below last year's of 8.6%.

So far for FY'12, reported outlays eased 2.4% due to across-the-board declines in spending. Health services spending fell 11.8% while income security payments fell 10.5% due to lower unemployment. Defense outlays dropped 3.2% and Medicare outlays were off 2.5%. Growth in social security outlays was steady with a 4.6% rise.

For FY'12 so far, net-receipts rose 2.8% versus FY'11. The lessened increase reflected just 0.6% y/y growth in individual income tax payments. Conversely, corporate tax payments jumped 58.6% y/y with the improved economy. Social insurance taxes fell 1.2% due to last year's tax cut.

Haver's basic data on Federal Government outlay and receipts and summary presentations of the Budget from both OMB and CBO are contained in USECON. Considerable detail is given in the separate GOVFIN database.

US Government Finance Feb. FY'12 YTD FY'11 FY'10 FY'09
Budget Balance $-231.7B $-580.8 $-1,298.6 $-1,294.2B $-1,415.7B
  As a percent of GDP -- -- 8.6 8.0 9.5
% of Total
Net Revenues (Y/Y % Change) 100 2.8 6.5 2.7 -16.6
  Individual Income Taxes 47 0.6 21.5 -1.8 -20.1
  Corporate Income Taxes 8 58.6 -5.4 38.5 -54.6
  Social Insurance Taxes 36 -1.2 -5.3 -2.9 -1.0
  Excise Taxes 3 9.8 8.2 7.1 -7.2
  Miscellaneous 4 -31.2 6.2 86.2 3.7
Net Outlays (Y/Y % Change) 100 -2.4 4.2 -1.8 18.2
  Nat'l Defense 20 -3.2 2.1 4.6 7.6
  Health 10 -11.8 1.0 10.4 19.1
  Medicare 20 -2.5 7.5 5.0 10.1
  Income Security 17 -10.5 -3.3 16.7 24.9
  Social Security 20 4.6 3.4 3.5 10.7
  Veterans Benefits 4 -5.3 17.3 13.6 12.7
  Interest 6 5.2 15.7 2.9 -24.6
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