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Economy in Brief

U.S. Government Budget Deficit Deepens
by Tom Moeller  March 22, 2019

The U.S. Treasury Department reported that the federal government budget deficit for February of $234.0 billion compared to a $215.2 billion deficit one year earlier. A $227.0 billion shortfall had been expected in the Action Economics Forecast Survey. During the first five months of FY'19, the deficit deepened to $544.2 billion compared to a deficit of $391.0 billion during the same period of FY'18.

Net revenues eased 0.6% y/y so far this fiscal year. Individual income receipts fell by 3.3% y/y so far in FY'19, compared to a 6.1% rise during all of FY'18. The marked cut in corporate tax rates reduced business income taxes by 19.5% y/y. Social insurance receipts rose 4.7% y/y following a 0.8% gain in FY'18, and excise taxes rose by roughly one-quarter y/y after last year's 13.3% increase.

Government spending increased 8.7% y/y so far in FY'19. National defense spending strengthened 11.1% y/y, roughly double the y/y gain during all of last year. Spending on health programs increased 8.2% y/y while Medicare outlays rose 14.4% y/y. Growth in income security payments has increased 6.3% y/y so far in FY'19. Social Security payments gained a steady 5.5% y/y. Interest payments rose by 15.8% 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 Feb FY'18 FY'17 FY'16 FY'15
Budget Balance (Billions) -- $-234.0 $-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 -0.6% 0.4% 1.5% 0.6% 7.6%
  Individual Income Taxes 51 -3.3 6.1 2.7 0.3 10.5
  Corporate Income Taxes -- -19.5 -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 23.6 13.3 -11.8 -3.3 5.3
Net Outlays  (Fiscal Year 2017 YTD, Y/Y % Change) 100 8.7 3.2 3.3 4.5 5.3
  National Defense 16 11.1 5.3 6.1 0.7 -2.3
  Health 13 8.2 3.3 -1.9 6.2 17.8
  Medicare 14 14.4 -1.4 0.6 8.7 6.7
  Income Security 12 6.3 -1.6 -2.1 1.0 -0.9
  Social Security 24 5.5 4.5 3.1 3.2 4.4
  Veterans Benefits & Services 4 20.1 1.3 1.2 9.3 6.8
  Education, Training, Employment & Social Services 2 7.9 -34.0 31.6 -10.2 34.7
  Interest 8 15.8 23.6 9.1 7.8 -1.8
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