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Economy in Brief

U.S. Government Budget Deficit Widens As Tax Rates Fall
by Tom Moeller  February 13, 2019

The U.S. Treasury Department reported that the federal government ran a $13.5 billion budget deficit during December 2018. The deficit compared to a shortfall of $23.2 billion during December 2017. The Action Economics Forecast Survey expected a zero budget balance. So far this fiscal year, the federal government ran a $318.9 billion budget deficit compared to a $225.0 billion deficit in the first three months of last fiscal year.

Net revenues were little changed y/y so far this fiscal year. Individual income taxes declined 3.5% y/y, compared to a 6.1% rise during all of FY'17. Corporate income taxes fell by 17.3% y/y. Social insurance receipts rose 5.8% y/y following last year's 0.8% gain, and excise taxes rose by roughly one-third y/y after last year's 13.3% increase.

Government spending increased 9.6% y/y so far this fiscal year. National defense spending rose 8.0% y/y after a 5.3% gain last year. Health insurance spending increased 7.3% y/y while Medicare outlays rose by nearly one-quarter y/y. Growth in income security payments increased 8.1% y/y. Social Security payments increased a steady 5.1% y/y. Interest payments rose by 18.6% y/y with the larger budget deficit.

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 Dec FY'18 FY'17 FY'16 FY'15
Budget Balance (Billions) -- $-13.5 $-779.0 $-665.8 $-585.6 $-439.1
  As a percent of GDP -- -- 3.9% 3.5% 3.2% 2.5%
% of Total
Net Revenues (Fiscal Year YTD 2018, Y/Y Change) 100 0.2% 0.4% 1.5% 0.6% 7.6%
  Individual Income Taxes 51 -3.5 6.1 2.7 0.3 10.5
  Corporate Income Taxes -- -17.3 -31.1 -0.8 -12.9 7.2
  Social Insurance Taxes 35 5.8 0.8 4.2 4.7 4.1
  Excise Taxes 3 36.4 13.3 -11.8 -3.3 5.3
Net Outlays  (Fiscal Year 2017 YTD, Y/Y % Change) 100 9.6 3.2 3.3 4.5 5.3
  National Defense 16 8.0 5.3 6.1 0.7 -2.3
  Health 13 7.3 3.3 -1.9 6.2 17.8
  Medicare 14 20.6 -1.4 0.6 8.7 6.7
  Income Security 12 8.1 -1.6 -2.1 1.0 -0.9
  Social Security 24 5.1 4.5 3.1 3.2 4.4
  Veterans Benefits & Services 4 25.5 1.3 1.2 9.3 6.8
  Education, Training, Employment & Social Services 2 18.6 -34.0 31.6 -10.2 34.7
  Interest 8 18.6 23.6 9.1 7.8 -1.8
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