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Economy in Brief

U.S. Government Budget Surplus Shrinks With Tax Cut
by Tom Moeller  March 5, 2019

The U.S. Treasury Department reported a federal government budget surplus of $8.7 billion during January compared to a $49.2 billion surplus during January 2018. A $6.0 billion surplus had been expected in the Action Economics Forecast Survey. So far this fiscal year, the federal government ran a $310.3 billion budget deficit compared to a $175.7 billion deficit in the first four months of last fiscal year.

Net revenues have declined 1.7% y/y so far this fiscal year. The cut in tax rates reduced individual income receipts by 5.4% y/y so far in FY'19, compared to a 6.1% rise during all of FY'18. Corporate income taxes fell by one-fifth y/y. Social insurance receipts rose 4.7% y/y following a 0.8% gain in FY'18, and excise taxes rose by nearly one-third y/y after last year's 13.3% increase.

Government spending has increased 8.8% y/y so far in FY'19. National defense spending strengthened 11.0% y/y, roughly double the y/y gain during all of last year. Health insurance spending increased 7.8% y/y while Medicare outlays rose 16.4% y/y. Growth in income security payments has increased 7.4% y/y so far in FY'19. Social Security payments increased a steady 5.2% y/y. Interest payments rose by 17.9% 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 Jan FY'18 FY'17 FY'16 FY'15
Budget Balance (Billions) -- $8.7 $-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 -1.7% 0.4% 1.5% 0.6% 7.6%
  Individual Income Taxes 51 -5.4 6.1 2.7 0.3 10.5
  Corporate Income Taxes -- -20.7 -31.1 -0.8 -12.9 7.2
  Social Insurance Taxes 35 4.7 0.8 4.2 4.7 4.1
  Excise Taxes 3 30.5 13.3 -11.8 -3.3 5.3
Net Outlays  (Fiscal Year 2017 YTD, Y/Y % Change) 100 8.8 3.2 3.3 4.5 5.3
  National Defense 16 11.0 5.3 6.1 0.7 -2.3
  Health 13 7.8 3.3 -1.9 6.2 17.8
  Medicare 14 16.4 -1.4 0.6 8.7 6.7
  Income Security 12 7.4 -1.6 -2.1 1.0 -0.9
  Social Security 24 5.2 4.5 3.1 3.2 4.4
  Veterans Benefits & Services 4 23.3 1.3 1.2 9.3 6.8
  Education, Training, Employment & Social Services 2 11.1 -34.0 31.6 -10.2 34.7
  Interest 8 17.9 23.6 9.1 7.8 -1.8
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