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Economy in Brief

U.S. Government Budget Deficit Widens in April
by Tom Moeller  May 12, 2021

• Budget deficit exceeds expectations.

• Coronavirus-related outlays balloon.

• Individual tax receipts strengthen with economic improvement.

The U.S. Treasury Department reported a federal budget deficit of $1.932 trillion for the first seven months of FY 2021. This compares to a $1.481 trillion deficit over the same period last year. For April alone, the deficit totaled $225.6 billion compared to expectations in the Action Economics Forecast Survey for a $130 billion deficit. One year ago, the first round of COVID-19 stimulus checks to individuals produced an April '20 deficit of $738.0 billion.

Federal government outlays have risen 22.5% y/y so far in FY'21. The increase includes a 95.3% surge in income security payments due to coronavirus relief payments, economic stimulus checks and outlays related to a higher unemployment rate. Spending on health programs grew 13.0% y/y so far this fiscal year. Social Security payments increased 3.8% y/y and defense outlays rose 6.6% y/y so far in FY'21. Medicare payments fell 9.5% y/y, due to calendar year differences, and interest payments fell 13.6% y/y so far in FY'21.

Overall revenues have increased 16.1% y/y so far this fiscal year. Individual income tax payments jumped 20.1% y/y in FY'21 due to improved economic growth while corporate tax payments demonstrated even more strength. Social insurance taxes rose 3.6% y/y, but the reduction in global economic trade lowered growth in customs duties to 1.1% y/y in FY'21.

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 Apr FY'20 FY'19 FY'18 FY'17
Budget Balance (Billion $) -- -$225,579 -$3,131.92 -$984.39 -$779.00 -$665.83
Fiscal YTD -- -$1,931.84 -- -- -- --
% of Total (FY 2020)
Net Revenues (Fiscal Year YTD 2021, Y/Y % Change) 100 16.1 -1.2 4.0 0.4 1.5
  Individual Income Taxes 47 20.1 -6.4 2.0 6.1 2.7
  Corporate Income Taxes 6 100.9 -8.0 12.5 -31.1 -0.8
  Social Insurance Taxes 38 3.6 5.4 6.2 0.8 4.2
  Customs Duties 2 1.1 -3.2 71.4 19.4 -0.8
Net Outlays  (Fiscal Year YTD 2021, Y/Y % Change) 100 22.5 47.3 8.2 3.2 3.3
  National Defense 11 6.6 5.6 8.8 0.1 6.1
  Health 11 13.0 28.0 6.1 9.8 -1.9
  Medicare 12 -9.5 19.2 10.6 -1.4 0.6
  Income Security 19 95.3 145.0 3.9 -1.6 -2.1
  Social Security 17 3.8 4.9 5.7 4.5 3.1
  Veterans Benefits & Services 3 18.5 9.3 11.9 1.3 1.2
  Education, Training, Employment & Social Services 4 21.7 75.5 43.7 -34.0 31.6
  Interest 5 -13.6 -8.2 15.7 23.6 9.1
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