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Economy in Brief

U.S. Government Budget Deficit Falls in FY 2021 as Economy Recovers
by Tom Moeller  September 13, 2021

• August budget deficit is below expectations.

• Receipts from individuals & corporations remain strong.

• Income security outlay growth slows.

The U.S. Treasury Department reported a federal budget deficit of $2.711 trillion for the first eleven months of FY 2021. This compares to a $3.007 trillion deficit over the same period last year. For August alone, the deficit totaled $170.64 billion compared to the August '20 deficit of $200.0 billion. Expectations had been for a $199 billion deficit in the Action Economics Forecast Survey.

Overall revenues have increased 17.7% y/y so far this fiscal year. Individual income tax receipts increased 26.4% y/y in FY'21 as employment & earnings continued to grow. Corporate tax payments strengthened 75.8% y/y with improved business profitability. Social insurance taxes eased 0.4% y/y but customs duties improved 15.4% y/y so far in FY'21.

Federal government outlays have risen 4.0% y/y so far in FY'21. Income security payments rose a greatly lessened 31.8% y/y in FY'21 with lower unemployment, and spending on health programs grew 6.0% y/y so far this fiscal year. Defense outlays rose 4.2% y/y so far in FY'21 while Social Security payments increased 3.6% y/y. Medicare payments declined 10.5% y/y while interest payments rose 3.5% y/y so far in FY'21.

Haver's data on Federal Government outlays are contained in USECON; The expectations figure is the AS1REPNA database.

A High-Level Look at Some of the Complexities in Labor Supply from the Federal Reserve Bank of Minneapolis is available here.

United States Government Finance Aug FY'20 FY'19 FY'18 FY'17
Budget Balance (Billion $) -- -$170.64 -$3,131.92 -$984.39 -$779.00 -$665.83
Fiscal YTD -- -$2,710.6 -- -- -- --
% of Total (FY 2020)
Net Revenues (Fiscal Year YTD 2021, Y/Y % Change) 100 17.7 -1.2 4.0 0.4 1.5
  Individual Income Taxes 47 26.4 -6.4 2.0 6.1 2.7
  Corporate Income Taxes 6 75.8 -8.0 12.5 -31.1 -0.8
  Social Insurance Taxes 38 -0.4 5.4 6.2 0.8 4.2
  Customs Duties 2 15.4 -3.2 71.4 19.4 -0.8
Net Outlays  (Fiscal Year YTD 2021, Y/Y % Change) 100 4.0 47.3 8.2 3.2 3.3
  National Defense 11 4.2 5.6 8.8 0.1 6.1
  Health 11 6.0 28.0 6.1 9.8 -1.9
  Medicare 12 -10.5 19.2 10.6 -1.4 0.6
  Income Security 19 31.8 145.0 3.9 -1.6 -2.1
  Social Security 17 3.6 4.9 5.7 4.5 3.1
  Veterans Benefits & Services 3 7.6 9.3 11.9 1.3 1.2
  Education, Training, Employment & Social Services 4 2.0 75.5 43.7 -34.0 31.6
  Interest 5 3.5 -8.2 15.7 23.6 9.1
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