Global| Oct 16 2015U.S. Budget Deficit Shrinks to Eight-Year Low As Revenues Strengthen
by:Tom Moeller
|in:Economy in Brief
Summary
The U.S. Treasury Department reported a $438.9 billion budget deficit during FY2015, narrower than the $483.4 billion deficit in FY2014. It was the smallest deficit since FY2007. As a percent of GDP, the roughly 2.5% was the least [...]
The U.S. Treasury Department reported a $438.9 billion budget deficit during FY2015, narrower than the $483.4 billion deficit in FY2014. It was the smallest deficit since FY2007. As a percent of GDP, the roughly 2.5% was the least since 1.3%, also in 2007. The latest projection from the Congressional Budget Office calls for a deficit of $414 billion next year then $416 billion in 2017.
The economic expansion raised overall revenues by 7.6% last year following an 8.9% rise in FY2014. The increase was powered by a 10.5% gain in individual income taxes, nearly double the rate of growth in FY2014. Corporate income tax growth eased, however, to 7.2% from 17.3%. Growth in social insurance contributions halved to 4.1%.
Government spending growth picked up to 5.2% during all of FY2015 from 1.4% in FY2014. Quickened growth reflected a 34.7% y/y rise in spending for education, training, employment & social services. Growth in outlays on health programs strengthened to 17.8% y/y with the Patient Protection and Affordable Care Act. Medicare spending growth ramped up to 6.7% y/y though Social Security payments growth was steady at 4.4% y/y. Veterans benefits & services growth eased to 6.8% y/y. These gains were countered by a 2.3% y/y drop in defense outlays which extended the declines of the prior three years. Income security payments fell 0.9% y/y with the lower unemployment rate while interest outlays declined 1.8% y/y.
An Update to the Budget and Economic Outlook: 2015 to 2025 from the Congressional Budget Office can be found here.
Haver's data on Federal Government outlays and receipts are contained in USECON. Considerable detail is given in the separate GOVFIN database. The Action Economics Forecast Survey numbers are in the AS1REPNA database.
| US Government Finance | FY'15 | FY'14 | FY'13 | FY'12 | |
|---|---|---|---|---|---|
| Budget Balance | -- | $438.9 bil. | $483.4 bil. | $-680.2 bil. | $-1,089.2 bil. |
| As a percent of GDP | -- | 2.5 | 2.8 | 4.1 | 6.8 |
| % of Total | |||||
| Net Revenues (Y/Y % Change) | 100 | 7.6% | 8.9% | 13.3% | 6.4% |
| Individual Income Taxes | 47 | 10.5 | 5.9 | 16.3 | 3.7 |
| Corporate Income Taxes | 11 | 7.2 | 17.3 | 12.9 | 33.8 |
| Social Insurance Taxes | 33 | 4.1 | 8.0 | 12.1 | 3.2 |
| Excise Taxes | 3 | 5.3 | 11.1 | 6.3 | 9.2 |
| Net Outlays (Y/Y % Change) | 100 | 5.2 | 1.4 | -2.4 | -1.7 |
| National Defense | 16 | -2.3 | -4.7 | -6.3 | -3.9 |
| Health | 13 | 17.8 | 14.3 | 3.3 | -7.0 |
| Medicare | 15 | 6.7 | 2.8 | 5.5 | -2.8 |
| Income Security | 14 | -0.9 | -4.3 | -1.1 | -9.1 |
| Social Security | 24 | 4.4 | 4.5 | 5.2 | 5.8 |
| Veterans Benefits & Services | 4 | 6.8 | 7.7 | 11.5 | -2.0 |
| Education, Training, Employment & Social Services | 3 | 34.7 | 25.9 | -21.9 | -10.3 |
| Interest | 6 | -1.8 | 2.8 | 0.4 | -3.0 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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