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Economy in Brief

U.S. Budget Deficit Shrinks to Eight-Year Low As Revenues Strengthen
by Tom Moeller  October 16, 2015

The U.S. Treasury Department reported a $438.9 billion budget deficit during FY2015, narrower than the $483.4 billion deficit in FY2014. It was the smallest deficit since FY2007. As a percent of GDP, the roughly 2.5% was the least since 1.3%, also in 2007. The latest projection from the Congressional Budget Office calls for a deficit of $414 billion next year then $416 billion in 2017.

The economic expansion raised overall revenues by 7.6% last year following an 8.9% rise in FY2014. The increase was powered by a 10.5% gain in individual income taxes, nearly double the rate of growth in FY2014. Corporate income tax growth eased, however, to 7.2% from 17.3%. Growth in social insurance contributions halved to 4.1%.

Government spending growth picked up to 5.2% during all of FY2015 from 1.4% in FY2014. Quickened growth reflected a 34.7% y/y rise in spending for education, training, employment & social services. Growth in outlays on health programs strengthened to 17.8% y/y with the Patient Protection and Affordable Care Act. Medicare spending growth ramped up to 6.7% y/y though Social Security payments growth was steady at 4.4% y/y. Veterans benefits & services growth eased to 6.8% y/y. These gains were countered by a 2.3% y/y drop in defense outlays which extended the declines of the prior three years. Income security payments fell 0.9% y/y with the lower unemployment rate while interest outlays declined 1.8% y/y.

An Update to the Budget and Economic Outlook: 2015 to 2025 from the Congressional Budget Office can be found here.

Haver's 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 FY'15 FY'14 FY'13 FY'12
Budget Balance -- $438.9 bil. $483.4 bil. $-680.2 bil. $-1,089.2 bil.
  As a percent of GDP -- 2.5 2.8 4.1 6.8
% of Total
Net Revenues (Y/Y % Change) 100 7.6% 8.9% 13.3% 6.4%
  Individual Income Taxes 47 10.5 5.9 16.3 3.7
  Corporate Income Taxes 11 7.2 17.3 12.9 33.8
  Social Insurance Taxes 33 4.1 8.0 12.1 3.2
  Excise Taxes 3 5.3 11.1 6.3 9.2
Net Outlays (Y/Y % Change) 100 5.2 1.4 -2.4 -1.7
  National Defense 16 -2.3 -4.7 -6.3 -3.9
  Health 13 17.8 14.3 3.3 -7.0
  Medicare 15 6.7 2.8 5.5 -2.8
  Income Security 14 -0.9 -4.3 -1.1 -9.1
  Social Security 24 4.4 4.5 5.2 5.8
  Veterans Benefits & Services 4 6.8 7.7 11.5 -2.0
  Education, Training, Employment & Social Services 3 34.7 25.9 -21.9 -10.3
  Interest 6 -1.8 2.8 0.4 -3.0
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