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Economy in Brief

U.S. Government Budget Deficit Expands Through August
by Tom Moeller  September 11, 2020

• Monthly budget gap increases deficit to $3.007 trillion so far in FY'20.

• Receipts decline moderately while outlays surge.

The U.S. Treasury Department reported that since the start of the fiscal year, which began in October, the cumulative budget deficit increased to $3.007 trillion versus $1.067 trillion one year ago. During August  alone, the federal government ran a $200.1 billion budget deficit, compared to a $200.3 billion deficit twelve months earlier. The Action Economics Survey anticipated a $385.0 billion deficit.

So far this fiscal year, the deficit has surpassed the full fiscal year deficit record of $984.2 billion set in 2019. The fiscal year-to-date deficit is roughly 15% of GDP.

On a FY basis, federal government outlays have jumped 45.7% so far this year. The increase in outlays was driven by a 142.6% surge in income security payments that reflected an unemployment rate which jumped to an average 7.3% so far this fiscal year from 3.8% during the first 11 months of FY'19. Defense outlays grew a lessened 4.5% y/y and health care outlays rose an accelerated 28.8% y/y in FY'20. Medicare payment growth eased to 13.8% y/y and social security payments grew a steady 5.0% y/y. Interest payments declined.

Overall revenues have fallen 1.3% so far this fiscal year. The recession lowered individual income tax receipts by 5.7% y/y. Corporate tax receipts fell slightly less. Growth in social insurance tax payments was stable at 4.9% y/y and the reduction in global economic trade lowered customs duties by 2.3% so far in FY'20.

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.

United States Government Finance August FY'19 FY'18 FY'17 FY'16
Budget Balance (Billions) -- $-200.1 $-984.16 $-779.00 $-665.80 $-664.80
Fiscal YTD -- $-3,007.39 -- -- -- --
  As a percent of GDP -- -13.0 -4.6 -3.8 -3.5 -3.2
% of Total (FY 2019)
Net Revenues (Fiscal Year YTD 2020, Y/Y % Change) 100 -1.3 4.0 0.4 1.5 0.6
  Individual Income Taxes 50 -5.7 2.0 6.1 2.7 0.3
  Corporate Income Taxes 7 -4.6 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 -2.3 71.4 19.4 -0.8 -0.6
Net Outlays  (Fiscal Year YTD 2020, Y/Y % Change) 100 45.7 8.2 3.2 3.3 4.5
  National Defense 15 4.5 8.8 0.1 6.1 0.7
  Health 13 28.8 6.1 9.8 -1.9 6.2
  Medicare 15 13.8 10.6 -1.4 0.6 8.7
  Income Security 12 142.6 4.0 -1.6 -2.1 1.0
  Social Security 23 5.0 5.7 4.5 3.1 3.2
  Veterans Benefits & Services 4 3.7 11.8 1.3 1.2 9.3
  Education, Training, Employment & Social Services 3 43.6 43.8 -34.0 31.6 -10.2
  Interest 8 -8.7 15.7 23.6 9.1 7.8
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