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Economy in Brief

U.S. Budget Deficit Continues On A Downward Trajectory
by Tom Moeller  April 10, 2014

The Federal Government posted a $36.9 billion budget deficit during March of FY 2014. The latest deficit was shallower than the Action Economics Forecast Survey expectation of an $80.0 billion deficit. In the first half of this fiscal year, the deficit total of $413.3 billion compares to $600.5 billion last year. It was the smallest budget deficit during the first six months of any fiscal year since 2008. The latest projection from the Office of Management and Budget calls for a deficit of $648.8 billion this year compared to $680 billion last year.

The smaller budget deficit so far this fiscal year reflects a 10.4% y/y rise in total revenues. Corporate income taxes increased 17.2% y/y while the improved labor market raised social insurance taxes by 14.0% y/y. Individual income taxes increased a lesser 5.3% y/y and excise taxes declined 1.2% y/y.

On the spending side, net outlays fell 3.5% so far this fiscal year versus last year. Outlays were led lower by a 6.2% y/y reduction in defense outlays, a 2.7% y/y falloff in interest payments and a 2.6% decline in income security payments. Working the other way, veterans benefits programs payments increased 10.8% y/y, health program outlays increased 9.5% y/y and social security payments rose 4.6% y/y. Medicare outlays were unchanged so far this fiscal year versus last.

Haver's basic data on Federal Government outlays 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 Mar FY'13 FY'12 FY'11 FY'10
Budget Balance -- $-36.9 bil. $-680.3 bil. $-1,089.2 bil. $-1,296.8 bil. $-1,294.2 bil.
  As a percent of GDP -- -- 4.1 6.8 8.4 8.8
% of Total YTD FY'14
Net Revenues (Y/Y % Change) 100 10.4% 13.3% 6.4% 6.5% 2.7%
  Individual Income Taxes 47 5.3 16.3 3.7 21.5 -1.8
  Corporate Income Taxes 10 17.2 12.9 33.8 -5.4 38.5
  Social Insurance Taxes 34 14.0 12.1 3.2 -5.3 -2.9
  Excise Taxes 3 -1.2 6.3 9.2 8.2 7.1
Net Outlays (Y/Y % Change) 100 -3.5 -2.4 -1.7 4.1 -1.8
  National Defense 18 -6.2 -6.3 -3.9 1.7 4.6
  Health 10 9.5 3.1 -7.0 1.0 10.4
  Medicare 14 0.0 5.5 -2.8 7.5 5.0
  Income Security 16 -2.6 -1.1 -9.1 -4.1 16.7
  Social Security 24 4.6 5.2 5.8 3.4 3.5
  Veterans Benefits 4 10.8 11.5 -2.0 17.3 13.6
  Interest 6 -2.7 0.4 -3.0 15.8 2.9
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