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Economy in Brief

U.S. Government Budget Deficit Surges to Record $864.1 Billion in June
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
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