U.S. Government Budget Balance Deteriorates

The Congressional Budget Office projects that the U.S. government will run a deficit between 4.6% to 5.4% of GDP for the next ten years. The current budget picture already has worsened. The U.S. Treasury Department reported that the federal government ran a $32.59 billion budget deficit during January compared to a $8.68 billion surplus twelve months earlier. An $11.5 billion surplus had been expected in the Action Economics Forecast Survey. For the first four months of this fiscal year, the budget deficit rose to $389.19 billion from $310.25 billion one year earlier.

So far this fiscal year, federal government receipts rose 6.1% y/y. Personal income tax revenues grew 5.5% y/y while corporate tax receipts improved 19.9% y/y. Social insurance taxes grew 5.5% y/y this fiscal year and customs duties, which include tariffs, jumped by 14.8% y/y.

In FY 2020, total federal government outlays have risen 10.3% y/y. Growth in Medicare outlays strengthened to 23.3% y/y so far this fiscal year, more than double last year's growth. Outlays on national defense programs grew 8.9% this fiscal year and have been growing at roughly that rate since early in 2019. Spending on Social Security increased 5.6% y/y during the first four months of FY 2020. Spending on income security programs grew 6.8% so far in FY 2020. Outlays on health programs grew 5.3% y/y in FY 2020 after a 6.1% y/y gain in FY 2019. Outlays on interest grew 1.7% so far this fiscal year after a 15.7% rise last year.

Haver's data on Federal Government outlays and receipts as well as CBO forecasts are contained in USECON; detailed data can be found in the GOVFIN database. The Action Economics Forecast Survey numbers are in the AS1REPNA database.

The Budget and Economic Outlook: 2020 to 2030 from the Congressional Budget Office is available here.

United States Government Finance January FY'19 FY'18 FY'17 FY'16 Budget Balance (Billions) -- $-32.59 $-984.39 $-779.00 $-665.80 $-664.80 Fiscal YTD -- $-389.19 -- -- -- --   As a percent of GDP -- -- -4.6% -3.8% -3.5% -3.2% % of Total Net Revenues (Fiscal Year YTD 2020, Y/Y % Change) 100 6.1 4.0 0.4 1.5 0.6   Individual Income Taxes 50 5.5 2.0 6.1 2.7 0.3   Corporate Income Taxes 7 19.9 5.4 -22.4 -2.0 -11.4   Social Insurance Taxes 36 5.5 6.2 0.8 4.2 4.7   Customs Duties 2 14.8 71.4 19.4 -0.8 -0.6 Net Outlays  (Fiscal Year YTD 2020, Y/Y % Change) 100 10.3 8.2 3.2 3.3 4.5   National Defense 15 8.9 8.8 0.1 6.1 0.7   Health 13 5.3 6.1 9.8 -1.9 6.2   Medicare 15 23.3 10.6 -1.4 0.6 8.7   Income Security 12 6.8 4.0 -1.6 -2.1 1.0   Social Security 23 5.6 5.7 4.5 3.1 3.2   Veterans Benefits & Services 4 19.0 11.8 1.3 1.2 9.3   Education, Training, Employment & Social Services 3 4.2 43.8 -34.0 31.6 -10.2   Interest 8 1.7 15.7 23.6 9.1 7.8