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Economy in Brief

U.S. Government Budget Deficit Narrows Sharply in June
by Tom Moeller  July 13, 2021

• Budget deficit is smaller than expected.

• Tax receipts improve with economic growth.

• Income-security outlays continue to grow.

The U.S. Treasury Department reported a federal budget deficit of $2.238 trillion for the first nine months of FY 2021. This compares to a $2.744 trillion deficit over the same period last year. For June alone, the deficit totaled $174.2 billion compared to the June '20 deficit of $864.1 billion. Expectations had been for a $204 billion deficit in the Action Economics Forecast Survey.

Overall revenues increased 35.2% y/y so far this fiscal year. Individual income tax payments jumped 61.6% y/y so far in FY'21 due to improved economic growth while corporate tax payments strengthened 187.9% y/y. Social insurance taxes eased 1.5% y/y but customs duties improved 11.2% y/y in FY'21.

Federal government outlays have risen 5.8% y/y so far in FY'21. The increase includes a 45.0% surge in income security payments due to COVID-19 support, including refundable tax credits, expanded unemployment compensation, and the Small Business Administration's Paycheck Protection Program. Spending on health programs grew 6.0% y/y so far this fiscal year. Defense outlays rose 4.7% y/y so far in FY'21 while Social Security payments increased 3.6% y/y. Medicare payments declined 12.5% y/y, due to calendar year differences, while interest payments eased 0.4% 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.

United States Government Finance Jun FY'20 FY'19 FY'18 FY'17
Budget Balance (Billion $) -- -$174,161 -$3,131.92 -$984.39 -$779.00 -$665.83
Fiscal YTD -- -$2,237.9 -- -- -- --
% of Total (FY 2020)
Net Revenues (Fiscal Year YTD 2021, Y/Y % Change) 100 35.2 -1.2 4.0 0.4 1.5
  Individual Income Taxes 47 61.6 -6.4 2.0 6.1 2.7
  Corporate Income Taxes 6 187.9 -8.0 12.5 -31.1 -0.8
  Social Insurance Taxes 38 -1.5 5.4 6.2 0.8 4.2
  Customs Duties 2 11.2 -3.2 71.4 19.4 -0.8
Net Outlays  (Fiscal Year YTD 2021, Y/Y % Change) 100 5.8 47.3 8.2 3.2 3.3
  National Defense 11 4.7 5.6 8.8 0.1 6.1
  Health 11 6.0 28.0 6.1 9.8 -1.9
  Medicare 12 -12.5 19.2 10.6 -1.4 0.6
  Income Security 19 45.0 145.0 3.9 -1.6 -2.1
  Social Security 17 3.6 4.9 5.7 4.5 3.1
  Veterans Benefits & Services 3 8.2 9.3 11.9 1.3 1.2
  Education, Training, Employment & Social Services 4 -4.5 75.5 43.7 -34.0 31.6
  Interest 5 -0.4 -8.2 15.7 23.6 9.1
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