Global| Sep 14 2018U.S. Government Budget Deficit Widens Sharply
by:Tom Moeller
|in:Economy in Brief
Summary
Faster growth in spending and a lessened increase in revenues is a sure formula for widening the budget deficit. The U.S. Treasury Department reported that during August, the federal government ran a $$214.1 billion budget deficit, [...]
Faster growth in spending and a lessened increase in revenues is a sure formula for widening the budget deficit. The U.S. Treasury Department reported that during August, the federal government ran a $$214.1 billion budget deficit, double the deficit in August 2017. A $166 billion deficit had been expected in the Action Economics Forecast Survey. During the first eleven months of fiscal year 2018, the federal government budget deficit totaled $898.1 billion, up one-third from $673.7 billion in the first eleven months of FY'17.
Government spending has increased 6.7% y/y so far in FY'18 compared to 3.3% growth during all of FY'17. Spending accelerated in most categories. National defense spending rose 6.8% y/y after minimal increases during the last two fiscal years. Medicare outlays jumped 8.3% y/y, following last year's negligible increase. Growth in income security payments rose 1.9% y/y after a 2.1% decline last year. Social Security payments rose an accelerated 7.4% y/y. Interest payments have increased 21.0% y/y so far in FY'18 after increasing 9.2% last fiscal year. Showing moderation was spending on health programs which rose 3.6% so far this year following a 4.1% gain in 2017.
Net revenues have risen 0.6% y/y so far in FY'18 after a 1.5% increase during all of last fiscal year. Corporate income tax receipts declined by nearly one-third y/y due to newly enacted tax cuts. That followed last fiscal year's 0.8% decline. Individual income taxes increased 7.0% y/y as employment continued to improve. That compared to a 2.7% rise during all of last fiscal year. Social insurance receipts were fairly flat y/y following last year's 4.2% rise, and excise taxes improved 8.7% y/y after last year's 11.8% decline.
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.
| United States Government Finance | Aug 2018 | FY'17 | FY'16 | FY'15 | FY'14 | FY'13 | |
|---|---|---|---|---|---|---|---|
| Budget Balance (Billions) | -- | $-214.1 | $-665.7 | $-585.6 | $-439.1 | $-483.4 | $-680.2 |
| As a percent of GDP | -- | -- | 3.5% | 3.2% | 2.5% | 2.8% | 4.1% |
| % of Total | |||||||
| Net Revenues (Fiscal Year YTD 2018, Y/Y % Change) | 100 | 0.6% | 1.5% | 0.6% | 7.6% | 8.9% | 13.3% |
| Individual Income Taxes | 47 | 7.0 | 2.7 | 0.3 | 10.5 | 5.9 | 16.3 |
| Corporate Income Taxes | 9 | -30.4 | -0.8 | -12.9 | 7.2 | 17.3 | 12.9 |
| Social Insurance Taxes | 34 | 0.5 | 4.2 | 4.7 | 4.1 | 8.0 | 12.1 |
| Excise Taxes | 3 | 8.7 | -11.8 | -3.3 | 5.3 | 11.1 | 6.3 |
| Net Outlays (Fiscal Year 2017 YTD, Y/Y % Change) | 100 | 6.7 | 3.3 | 4.5 | 5.3 | 1.4 | -2.4 |
| National Defense | 16 | 6.8 | 0.8 | 0.7 | -2.3 | -4.7 | -6.3 |
| Health | 12 | 3.6 | 4.1 | 6.2 | 17.8 | 14.3 | 3.3 |
| Medicare | 14 | 8.3 | 0.6 | 8.7 | 6.7 | 2.8 | 5.5 |
| Income Security | 12 | 1.9 | -2.1 | 1.0 | -0.9 | -4.3 | -1.1 |
| Social Security | 24 | 7.4 | 3.1 | 3.2 | 4.4 | 4.5 | 5.2 |
| Veterans Benefits & Services | 4 | 10.8 | 1.2 | 9.3 | 6.8 | 7.7 | 11.5 |
| Education, Training, Employment & Social Services | 2 | -33.5 | 31.6 | -10.2 | 34.7 | 25.9 | -21.9 |
| Interest | 9 | 21.0 | 9.2 | 7.8 | -1.8 | 2.8 | 0.4 |
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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