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Economy in Brief

U.S. Budget Deficit Reaches Three-Year High
by Tom Moeller  October 17, 2016

The U.S. Treasury Department reported that during fiscal year 2016 the federal government ran a budget deficit of $587.4 billion versus $438.9 billion in FY'15. It was the largest budget shortfall since FY'13, and brought the deficit to 3.2% of GDP, up from 2.5% last year. For the month of September alone, a surplus of $33.4 billion compared to $90.9 billion last year. A $29.3 billion September surplus was expected in the Action Economics Forecast Survey.

Overall revenues improved 0.6% versus FY'15. The total was pulled lower by a 12.9% y/y decline in corporate income tax payments, compared to 7.2% growth in FY'15. Individual income taxes rose 0.3% y/y following last year's 10.5% rise. Social insurance contributions increased 4.7% y/y while excise taxes fell 3.3% y/y.

Government spending increased 4.5% y/y in FY'16 compared to 5.3% growth in last year. Medicare outlays grew 8.8%, the most since 2009, and outlays on health programs gained a diminished 6.0% y/y. Social Security benefits rose a lessened 3.2% y/y while Veterans Payments grew 9.3% y/y, the most in three years. Income Security Program payments improved 1.0% y/y, the first rise since 2010. National Defense spending edged 0.7% higher, continuing the weakness of the last several years. Spending on Education, Training, Employment & Social Services declined 10.2% y/y while interest payments increased 7.8% in FY'16.

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 FY'16 FY'15 FY'14 FY'13 FY'12
Budget Balance -- $-587.4 bil. $-438.9 bil. $-483.4 bil. $-680.2 bil. $-1,089.2 bil.
  As a percent of GDP -- 3.2% 2.5% 2.8% 4.1% 6.8%
% of Total
Net Revenues (Fiscal Year 2016, Y/Y % Change) 100 0.6% 7.6% 8.9% 13.3% 6.4%
  Individual Income Taxes 47 0.3 10.5 5.9 16.3 3.7
  Corporate Income Taxes 9 -12.9 7.2 17.3 12.9 33.8
  Social Insurance Taxes 34 4.7 4.1 8.0 12.1 3.2
  Excise Taxes 3 -3.3 5.3 11.1 6.3 9.2
Net Outlays  (Fiscal year 2016, Y/Y % Change) 100 4.5 5.3 1.4 -2.4 -1.7
  National Defense 15 0.7 -2.3 -4.7 -6.3 -3.9
  Health 13 6.0 17.8 14.3 3.3 -7.0
  Medicare 15 8.8 6.7 2.8 5.5 -2.8
  Income Security 13 1.0 -0.9 -4.3 -1.1 -9.1
  Social Security 24 3.2 4.4 4.5 5.2 5.8
  Veterans Benefits & Services 4 9.3 6.8 7.7 11.5 -2.0
  Education, Training, Employment & Social Services 3 -10.2 34.7 25.9 -21.9 -10.3
  Interest 6 7.8 -1.8 2.8 0.4 -3.0
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