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Economy in Brief

U.S. Government Budget Deficit Surged In FY 2020
by Tom Moeller  October 16, 2020

• Budget gap totals $3.132 trillion.

• The deficit accounted for roughly 16% of GDP, the most since 1945.

• Receipts declined while outlays surged.

The U.S. Treasury Department reported that the budget deficit increased to $3.132 trillion during FY 2020 as the unemployment rate surged and health care outlays related to the coronavirus jumped. During September alone, the deficit of $124.611 billion compared to an $82.768 surplus twelve months earlier. The Action Economics Survey anticipated a $124.0 billion deficit for last month.

Federal government outlays jumped 47.3% in FY 2020 to $6.55 trillion. The increase was driven by a 145.0% surge in income security payments to $1.26 trillion, stemming from coronavirus relief payments and a spike in the unemployment rate to an average 7.3% in FY 2020 from 3.7% in FY 2019. Health care spending surged to $748.0 billion (28.0% y/y) in FY 2020 while Medicare spending rose to $776,2 billion (19.2% y/y). Social security payments grew a lessened 4.9% y/y to $1.10 trillion while growth in defense outlays also slowed to 5.6% y/y to $726 billion. Interest payments declined 8.2% versus FY 2019 to $345 billion.

Overall revenues declined 1.2% during the last fiscal year to $3.420 trillion. The recession lowered individual income tax receipts by 6.4% y/y to $1.61 trillion. Corporate tax receipts fell slightly more. Growth in social insurance tax payments eased to 5.4% y/y to $1.31 trillion and the reduction in global economic trade lowered customs duties by 3.2%.

Haver's data on Federal Government outlays 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 FY'20 FY'19 FY'18 FY'17
Budget Balance (Billion $) -- $-3,132 $-984.16 $-779.00 $-665.80
Fiscal YTD -- -- -- -- --
  As a percent of GDP -- 16.1 4.6 3.8 3.5
% of Total (FY 2020)
Net Revenues (Fiscal Year YTD 2020, Y/Y % Change) 100 -1.2 4.0 0.4 1.5
  Individual Income Taxes 47 -6.4 2.0 6.1 2.7
  Corporate Income Taxes 6 -8.0 12.5 -31.1 -0.8
  Social Insurance Taxes 38 5.4 6.2 0.8 4.2
  Customs Duties 2 -3.2 71.4 19.4 -0.8
Net Outlays  (Fiscal Year YTD 2020, Y/Y % Change) 100 47.3 8.2 3.2 3.3
  National Defense 11 5.6 8.8 0.1 6.1
  Health 11 28.0 6.1 9.8 -1.9
  Medicare 12 19.2 10.6 -1.4 0.6
  Income Security 19 145.0 3.9 -1.6 -2.1
  Social Security 17 4.9 5.7 4.5 3.1
  Veterans Benefits & Services 3 9.3 11.8 1.3 1.2
  Education, Training, Employment & Social Services 4 75.5 43.8 -34.0 31.6
  Interest 5 -8.2 15.7 23.6 9.1
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