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Viewpoints
Commentaries are the opinions of the author and do not reflect the views of Haver Analytics.
by Tom Moeller July 13, 2020
• Monthly budget deficit pulls fiscal YTD deficit to $2.744 trillion.
• Receipts weaken sharply while outlays surge.
The U.S. Treasury Department reported that the federal government ran an $864.1 billion budget deficit last month, compared to an $8.5 billion deficit twelve months earlier. The Action Economics Survey anticipated an $800 billion deficit. Since the start of the fiscal year, which began in October, the cumulative deficit increased to $2.74 trillion versus $747.11 billion one year ago.
So far this fiscal year, the deficit has surpassed the full fiscal year record of $1.41 trillion set in 2009. The fiscal year-to-date deficit is roughly 13% of GDP.
On a FY basis, federal government outlays jumped 49.1% this year. The increase in outlays was driven by a 131% jump in income security payments this fiscal year which reflected the higher unemployment rate and payments for the government's Paycheck Protection Plan. Defense outlays grew a lessened 6.0% y/y and health care outlays rose an accelerated 27.4% y/y in FY20. Medicare payment growth jumped to 22.3% y/y.
On the revenue front, the recession and the extension of the April 15 tax-filing deadline to July 15 lowered individual income tax receipts by 24.3% y/y. Corporate tax receipts fell even more sharply. Growth in social insurance tax payments slowed to 4.9% y/y and the reduction in global economic trade pulled the y/y advance in customs duties down to 2.2% so far in FY 2020.
Haver's data on Federal Government outlays and receipts as well as CBO forecasts are contained in USECON; detailed data can be found in the GOVFIN database. The Action Economics Forecast Survey numbers are in the AS1REPNA database.
Policymakers' Response to COVID-19 Can Draw on Great Recession Lessons from the Federal Reserve Bank of Dallas is available here.
United States Government Finance | June | FY'19 | FY'18 | FY'17 | FY'16 | |
---|---|---|---|---|---|---|
Budget Balance (Billions) | -- | $-864.07 | $-984.16 | $-779.00 | $-665.80 | $-664.80 |
Fiscal YTD | -- | $-2,744.30 | -- | -- | -- | -- |
As a percent of GDP | -- | -12.7 | -4.6 | -3.8 | -3.5 | -3.2 |
% of Total (FY 2019) | ||||||
Net Revenues (Fiscal Year YTD 2020, Y/Y % Change) | 100 | -13.4 | 4.0 | 0.4 | 1.5 | 0.6 |
Individual Income Taxes | 50 | -24.3 | 2.0 | 6.1 | 2.7 | 0.3 |
Corporate Income Taxes | 7 | -60.0 | 12.5 | -31.1 | -0.8 | -12.9 |
Social Insurance Taxes | 36 | 4.9 | 6.2 | 0.8 | 4.2 | 4.7 |
Customs Duties | 2 | 2.2 | 71.4 | 19.4 | -0.8 | -0.6 |
Net Outlays (Fiscal Year YTD 2020, Y/Y % Change) | 100 | 49.1 | 8.2 | 3.2 | 3.3 | 4.5 |
National Defense | 15 | 6.0 | 8.8 | 0.1 | 6.1 | 0.7 |
Health | 13 | 27.4 | 6.1 | 9.8 | -1.9 | 6.2 |
Medicare | 15 | 22.3 | 10.6 | -1.4 | 0.6 | 8.7 |
Income Security | 12 | 130.7 | 4.0 | -1.6 | -2.1 | 1.0 |
Social Security | 23 | 5.1 | 5.7 | 4.5 | 3.1 | 3.2 |
Veterans Benefits & Services | 4 | 7.7 | 11.8 | 1.3 | 1.2 | 9.3 |
Education, Training, Employment & Social Services | 3 | 46.0 | 43.8 | -34.0 | 31.6 | -10.2 |
Interest | 8 | -9.3 | 15.7 | 23.6 | 9.1 | 7.8 |