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Economy in Brief

U.S. Budget Deficit Deepens Y/Y
by Tom Moeller  January 12, 2017

The U.S. Treasury Department reported that during December, the federal government ran a $27.5 billion budget deficit compared to a $14.4 billion deficit in December 2015. A $23.0 billion deficit had been expected in the Action Economics Forecast Survey. So far in FY'17, the federal government ran a $208.4 billion budget deficit compared to $215.6 billion in the first three months of FY'16.

Overall revenues declined 3.2% so far in FY'17 versus FY'16. Individual income taxes improved 0.4% y/y following a 0.3% rise in all of FY'16. Social insurance contributions increased 4.6% y/y, roughly equaling last year's increase, while excise taxes fell 2.5% y/y, less than last year's 3.3% fall. Corporate income taxes declined by 10.8% y/y following a 12.9% drop.

Government spending declined 3.3% y/y so far in FY'17 compared to 4.5% growth during all of last year. Medicare outlays declined 11.0% y/y after 8.8% growth in FY'16, and Social Security payments declined 7.8% following 3.2% increase in FY'16. Income Security Program payments fell 5.8% y/y after a 1.0% rise. National Defense spending also was down by 2.2% y/y, continuing the weakness of the last several years. To the upside was spending on Health programs which grew by 7.7% y/y after 6.0% growth in FY'16. Spending on Education, Training, Employment & Social Services declined 11.5% y/y, while spending on Veterans Benefits & Services fell 9.9% y/y. Interest payments increased 15.7% so far in FY'17 following 7.8% growth last year.

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.

United States Government Finance December FY'16 FY'15 FY'14 FY'13
Budget Balance -- $-27.5 bil. $-587.4 bil. $-438.9 bil. $-483.4 bil. $-680.2 bil.
  As a percent of GDP -- 3.2% 2.5% 2.8% 4.1%
% of Total
Net Revenues (Fiscal Year 2017, Y/Y % Change) 100 -3.2% 0.6% 7.6% 8.9% 13.3%
  Individual Income Taxes 47 0.4 0.3 10.5 5.9 16.3
  Corporate Income Taxes 9 -10.8 -12.9 7.2 17.3 12.9
  Social Insurance Taxes 34 4.6 4.7 4.1 8.0 12.1
  Excise Taxes 3 -2.5 -3.3 5.3 11.1 6.3
Net Outlays  (Fiscal year 2017, Y/Y % Change) 100 -3.3 4.5 5.3 1.4 -2.4
  National Defense 15 -2.2 0.7 -2.3 -4.7 -6.3
  Health 13 7.7 6.0 17.8 14.3 3.3
  Medicare 15 -11.0 8.8 6.7 2.8 5.5
  Income Security 13 -5.8 1.0 -0.9 -4.3 -1.1
  Social Security 24 -7.8 3.2 4.4 4.5 5.2
  Veterans Benefits & Services 4 -9.9 9.3 6.8 7.7 11.5
  Education, Training, Employment & Social Services 3 -11.5 -10.2 34.7 25.9 -21.9
  Interest 6 15.7 7.8 -1.8 2.8 0.4
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