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Economy in Brief

U.S. Government Budget Deficit Deepens in January
by Tom Moeller  February 10, 2021

• Deficit share of GDP continues to balloon.

• Outlay surge driven by coronavirus aid.

• Higher unemployment reduces personal tax receipts.

The U.S. Treasury Department reported that the federal budget deficit of $162.8 billion during January compared to a deficit of $32.6 billion one year earlier. The latest result pulled the deficit for the first four months of this fiscal year to $735.7 billion, roughly one-third of GDP.

Federal government outlays have risen 22.7% y/y so far in FY'21. The increase was driven by a 178.7% surge in income security payments stemming from coronavirus relief, economic stimulus checks and a higher unemployment rate. Spending on health programs increased 28.7% y/y. Medicare payments grew 9.7% y/y and Social Security payments rose 4.2% y/y. Defense outlays rose 3.3% y/y so far in FY'21 but interest payments declined 14.2%.

Overall revenues have improved 0.8% y/y so far this fiscal year. The recession has lowered individual income tax payments by 3.8% y/y so far in FY'21 but corporate tax payments have improved. Social insurance taxes rose 5.9% y/y, but the reduction in global economic trade lowered customs duties by 14.3% y/y.

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 Jan FY'20 FY'19 FY'18 FY'17
Budget Balance (Billion $) -- -$162.83 -$3,131.92 -$984.16 -$779.14 -$665.45
Fiscal YTD -- -$735.73 -- -- -- --
  As a percent of GDP -- 34.3% 16.1% 4.6% 3.8% 3.5%
% of Total (FY 2020)
Net Revenues (Fiscal Year YTD 2021, Y/Y % Change) 100 0.8 -1.3 4.0 0.4 1.5
  Individual Income Taxes 47 -3.8 -6.4 2.0 6.1 2.7
  Corporate Income Taxes 6 12.4 -8.0 12.5 -31.1 -0.8
  Social Insurance Taxes 38 5.9 5.4 6.2 0.8 4.2
  Customs Duties 2 -14.3 -3.2 71.4 19.5 -0.8
Net Outlays  (Fiscal Year YTD 2021, Y/Y % Change) 100 22.7 47.3 8.3 3.2 3.3
  National Defense 11 3.3 5.9 8.7 5.4 0.9
  Health 11 28.7 28.0 6.1 3.4 4.3
  Medicare 12 -9.7 19.2 10.6 -1.4 0.5
  Income Security 19 178.7 145.3 3.9 -1.6 -2.1
  Social Security 17 4.2 4.9 5.7 4.5 3.1
  Veterans Benefits & Services 3 -4.4 9.4 11.7 1.3 1.2
  Education, Training, Employment & Social Services 4 10.5 73.1 43.2 -33.7 31.2
  Interest 5 -14.2 -8.1 15.4 23.8 9.4
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