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Economy in Brief

U.S. Budget Deficit Eases as Revenues Surge
by Tom Moeller  May 12, 2015

The Federal Government reported a $156.7 billion budget surplus during April compared to a $106.9 billion surplus during April of 2014. A $141.0 billion surplus had been expected in the Action Economics Forecast Survey. For the first seven months of Fiscal Year 2015, the deficit eased to $282.8 billion compared to a $306.4 billion deficit in the first seven months of FY 2014. Projections from the Congressional Budget Office call for a budget deficit of $486 billion in FY 2015 compared to $483.4 billion last year, then a $455 billion deficit in FY 20016.

The easing of the budget deficit so far this fiscal year versus FY'14 occurred as April revenues surged 13.9% y/y, pulling overall fiscal year-to-date receipts up 8.9% y/y. Individual income taxes jumped 21.0% y/y in April pulling the Fiscal YTD total up 12.9% y/y. Earlier this year, y/y gains were running in the high single digits. Growth in corporate income taxes remained strong at 11.8% y/y. Improved labor markets left social insurance taxes & contributions growing 3.7% y/y while excise taxes slipped 0.6% y/y.

The pickup in government receipts occurred none-to-soon as outlay growth so far this fiscal year was a firm 6.4% y/y, despite a 3.0% decline in defense outlays. Spending on health programs accelerated to 20.5% y/y with the Patient Protection and Affordable Care Act. Education, Training, Employment & Social Services spending growth also accelerated to 21.5% y/y. Medicare spending growth strengthened to 8.2% y/y. Veterans benefits growth diminished to 5.4% y/y while Social Security payments growth was fairly steady at 4.4%. Interest payments declined 7.1% following a 3.9% drop one year earlier.

Haver's basic data on Federal Government outlays and receipts are contained in USECON. Considerable detail is given in the separate GOVFIN database. The Action Economics Forecast Survey numbers are in the AS1REPNA database.

 US Government Finance Apr FY'14 FY'13 FY'12 FY'11
Budget Balance -- $156.7 bil. $-483.4 bil. $-680.2 bil. $-1,089.2 bil. $-1,296.8 bil.
  As a percent of GDP -- 2.8 4.1 6.8 8.4
% of Total FY'15 YTD
Net Revenues (Y/Y % Change) 100 8.9% 8.9% 13.3% 6.4% 6.5%
  Individual Income Taxes 47 12.9 5.9 16.3 3.7 21.5
  Corporate Income Taxes 10 11.8 17.3 12.9 33.8 -5.4
  Social Insurance Taxes 34 3.7 8.0 12.1 3.2 -5.3
  Excise Taxes 3 -0.6 11.1 6.3 9.2 8.2
Net Outlays (Y/Y % Change) 100 6.4 1.4 -2.4 -1.7 4.1
  National Defense 18 -3.0 -4.7 -6.3 -3.9 1.7
  Health 10 20.5 14.2 3.1 -7.0 1.0
  Medicare 14 8.2 2.8 5.5 -2.8 7.5
  Income Security 16 -1.6 -4.3 -1.1 -9.1 -4.1
  Social Security 24 4.4 4.6 5.2 5.8 3.4
  Veterans Benefits & Services 4 5.4 7.7 11.5 -2.0 17.3
  Education, Training, Employment & Social Services 3 21.5 25.9 -21.9 -10.3 -20.6
  Interest 6 -7.1 3.0 0.4 -3.0 15.8
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