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Economy in Brief

U.S. Budget Deficit Deepens Substantially
by Tom Moeller  July 13, 2016

So far in FY'16, the federal government's budget deficit totaled $400.8 billion, up 26.7% versus $316.4 billion in the first nine months of FY'15. That result was highlighted in today's U.S. Treasury Department report of a $6.3 billion budget surplus during June, reduced from the $50.5 billion surplus twelve months earlier. A $23.5 billion surplus had been expected in the Action Economics Forecast Survey.

Overall revenues increased 0.9% so far in FY'16 versus the first nine months of FY'15. The gain was pulled lower by a 12.6% y/y decline in corporate income tax payments, compared to 7.2% growth in 2015. Individual income taxes grew a negligible 0.4% y/y. Social insurance contributions increased 4.2% y/y while excise taxes fell 1.9% y/y.

Government spending increased 3.9% y/y so far in FY'16 compared to a 5.2% rise last year. Outlays on health programs gained 6.5% y/y with the Patient Protection and Affordable Care Act. Veterans Benefits & Services rose 5.3% y/y. Medicare payments strengthened 4.3% y/y while Social Security benefits rose 3.3% y/y. National Defense Spending fell 1.1% y/y, continuing the declines of the last several years. Spending on Education, Training, Employment & Social Services eased 0.6% y/y, and income security payments fell 0.2% y/y. Interest payments increased 11.9% so far this fiscal year versus 2015.

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.

The 2016 Long-Term Budget Outlook from the Congressional Budget Office can be found here.

United States Government Finance June 2016 FY'15 FY'14 FY'13 FY'12
Budget Balance -- $6.3 bil. -$438.9 bil. -$483.4 bil. -$680.2 bil. -$1,089.2 bil.
  As a percent of GDP -- 2.2% ytd 2.5% 2.8% 4.1% 6.8%
% of Total
Net Revenues (Fiscal YTD, Y/Y % Change) 100 0.9% 7.6% 8.9% 13.3% 6.4%
  Individual Income Taxes 47 0.4 10.5 5.9 16.3 3.7
  Corporate Income Taxes 11 -12.6 7.2 17.3 12.9 33.8
  Social Insurance Taxes 33 4.2 4.1 8.0 12.1 3.2
  Excise Taxes 3 -1.9 5.3 11.1 6.3 9.2
Net Outlays  (Fiscal YTD, Y/Y % Change) 100 3.9 5.2 1.4 -2.4 -1.7
  National Defense 16 -1.1 -2.3 -4.7 -6.3 -3.9
  Health 13 6.5 17.8 14.3 3.3 -7.0
  Medicare 15 4.3 6.7 2.8 5.5 -2.8
  Income Security 14 -0.2 -0.9 -4.3 -1.1 -9.1
  Social Security 24 3.3 4.4 4.5 5.2 5.8
  Veterans Benefits & Services 4 5.3 6.8 7.7 11.5 -2.0
  Education, Training, Employment & Social Services 3 -0.6 34.7 25.9 -21.9 -10.3
  Interest 6 11.9 -1.8 2.8 0.4 -3.0
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