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Economy in Brief

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

• Coronavirus relief drives spending.

• Revenues begin to rise with economy.

U.S. Treasury Department reported a federal budget deficit of $310.9 billion during February compared to a deficit of $235.3 billion one year earlier. The latest result raised the deficit for the first five months of this fiscal year to $1.047 trillion.

Federal government outlays have risen 24.7% y/y so far in FY'21. The increase was driven by a 125.0% surge in income security payments stemming from coronavirus relief, economic stimulus checks and a higher unemployment rate. Spending on health programs increased 2.6% y/y. Medicare payments declined 5.8% y/y and Social Security payments rose 4.1% y/y. Defense outlays rose 2.3% y/y so far in FY'21 but interest payments declined 14.6%.

Overall revenues have improved 5.1% y/y so far this fiscal year. Individual income tax payments rose 5.0% y/y so far in FY'21 due to improved economic growth while corporate tax payments also increased. Social insurance taxes rose 4.7% y/y, but the reduction in global economic trade lowered customs duties by 11.6% 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 Feb FY'20 FY'19 FY'18 FY'17
Budget Balance (Billion $) -- -$310.922 -$3,131.92 -$984.16 -$779.14 -$665.45
Fiscal YTD -- -$1,047.65 -- -- -- --
% of Total (FY 2020)
Net Revenues (Fiscal Year YTD 2021, Y/Y % Change) 100 5.1 -1.2 4.0 0.4 1.5
  Individual Income Taxes 47 5.0 -6.4 2.0 6.1 2.7
  Corporate Income Taxes 6 20.7 -8.0 12.5 -31.1 -0.8
  Social Insurance Taxes 38 4.7 5.4 6.2 0.8 4.2
  Customs Duties 2 -11.6 -3.2 71.4 19.5 -0.8
Net Outlays  (Fiscal Year YTD 2021, Y/Y % Change) 100 24.7 47.3 8.2 3.2 3.3
  National Defense 11 2.3 5.6 8.8 5.4 0.9
  Health 11 25.6 28.0 6.1 3.4 4.3
  Medicare 12 -5.8 19.2 10.6 -1.4 0.5
  Income Security 19 125.0 145.0 3.9 -1.6 -2.1
  Social Security 17 4.1 4.9 5.7 4.5 3.1
  Veterans Benefits & Services 3 -2.7 9.3 11.9 1.3 1.2
  Education, Training, Employment & Social Services 4 6.9 75.5 43.7 -33.7 31.2
  Interest 5 -14.6 -8.2 15.7 23.8 9.4
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