econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 08 June 2016

May 2016 CBO Monthly Budget Review: Estimated Deficit $53 Billion

from the Congressional Budget Office

The federal budget deficit was $408 billion for the first eight months of fiscal year 2016, the Congressional Budget Office estimates - $41 billion more than the shortfall recorded during the same period last year. Outlays were 3 percent higher than they were at this time last year, and receipts were 2 percent higher.

Total Receipts: Up by 2 Percent in the First Eight Months of Fiscal Year 2016

Receipts totaled $2,137 billion during the first eight months of fiscal year 2016, CBO estimates—$33 billion more than they did during the same period last year. The changes were as follows:

  • Individual income taxes and payroll (social insurance) taxes together rose by $41 billion (or 2 percent).
    • Amounts withheld from workers' paychecks accounted for an increase of $61 billion (or 4 percent). Growth in wages and salaries probably explains that increase.
    • Nonwithheld receipts declined by $4 billion (or 1 percent). That decline stemmed from two partially offsetting changes: a drop of $16 billion (or 5 percent), mostly in people's final tax payments for 2015, during the tax-filing season from February through April; and an increase of $11 billion during the other months covered in this report.
    • Income tax refunds increased by $13 billion (or 6 percent), reducing net receipts.
    • Receipts from unemployment insurance taxes (one kind of payroll tax) fell by $2 billion.
  • Corporate income taxes declined by $21 billion (or 11 percent). About half of the decline occurred between October and March, when firms paid taxes that were largely on their taxable profits in the 2015 tax year. The other half of the decline occurred in April and May, when most firms began paying taxes on their taxable profits in 2016. Part of the decline in receipts in the past two months probably stems from the enactment in December of the Consolidated Appropriations Act, 2016 (Public Law 114-113), which extended—retroactively and prospectively—tax rules that allow businesses with large amounts of investment to accelerate their deductions for that investment. Because of the timely enactment of that law, many businesses will make lower payments of estimated taxes in 2016 than they made in 2015, when the rules had temporarily expired.
  • Other receipts rose by $13 billion, on net. Remittances from the Federal Reserve to the Treasury increased by $22 billion, largely because of the Fixing America's Surface Transportation Act (P.L. 114-94), which required the Federal Reserve to remit most of its surplus account to the Treasury. The central bank remitted that additional amount, $19 billion, in late December. All other receipts decreased by $9 billion, on net.

Total Outlays: Up by 3 Percent in the First Eight Months of Fiscal Year 2016

At $2,545 billion, outlays for the first eight months of this fiscal year were $75 billion (or 3 percent) more than they were during the same period last year, CBO estimates. The largest increases were in the following categories:

  • Spending for Social Security benefits rose by $20 billion (or 3 percent), reflecting typical growth in the number of beneficiaries and in the average payment.
  • Outlays for net interest on the public debt increased by $17 billion (or 11 percent). Most of that increase resulted from differences in the rate of inflation. The principal of Treasury inflation-protected securities is adjusted to account for inflation using the change in the consumer price index for all urban consumers that was recorded two months earlier. That adjustment was negative in both 2015 and 2016—that is, it reduced outlays in both years—but the reduction in 2016 was smaller than the one in 2015.
  • Medicare spending climbed by $16 billion (or 4 percent), partly because the payments made to prescription drug plans each autumn to account for unanticipated increases in spending in the preceding calendar year were larger in fiscal year 2016 than in fiscal year 2015. Without that change, Medicare outlays would have increased by $10 billion (or 3 percent).
  • Outlays for Medicaid grew by $13 billion (or 6 percent), largely because of new enrollees added through expansions of coverage authorized by the Affordable Care Act.
  • Spending by the Department of Veterans Affairs increased by $6 billion (or 6 percent), mostly because of increases in the number of veterans receiving disability payments and in the average amount of those payments.

Outlays in some areas of the budget declined:

  • Outlays for the Department of Housing and Urban Development decreased by $12 billion, primarily because the department made downward revisions in April 2016, but upward revisions in April 2015, to the estimated net subsidy costs of loans and loan guarantees issued in prior years.
  • Spending by the Department of Defense dropped by $6 billion (or 2 percent), mostly in the area of operation and maintenance.

For other programs and activities, spending increased or decreased by smaller amounts.

Estimated Deficit in May 2016: $53 Billion

The federal government incurred a deficit of $53 billion in May 2016, CBO estimates—$31 billion less than the deficit in May 2015. Because May 1 fell on a weekend this year, certain payments scheduled for that date were instead made in April. If not for that shift, the deficit in May 2016 would have totaled $94 billion, or $10 billion more than in May 2015.

CBO estimates that receipts totaled $223 billion in May 2016—$10 billion (or 5 percent) more than they did last May. Receipts from individual income taxes and payroll taxes combined rose by $17 billion (or 9 percent). That increase was largely explained by taxes withheld from workers' paychecks, which were up by $16 billion (or 10 percent)—May 2016 had one more major payment day for withheld taxes than May 2015 did. All other receipts declined by $7 billion, on net.

Total spending was $276 billion in May 2016, CBO estimates—$20 billion less than in May 2015. If not for the shift in the timing of payments from May to April this year, outlays would have increased by $20 billion (or 7 percent). The following discussion reflects adjustments to account for that shift.

Among the largest changes in outlays were the following:

  • Outlays increased by $12 billion because this May there were no payments to the Federal Communications Commission from auctions of licenses to use the electromagnetic spectrum. Because proceeds from those auctions are recorded in the budget as offsetting receipts (that is, as reductions in outlays), the decrease in payments resulted in higher outlays.
  • Spending for the three largest entitlement programs—Social Security, Medicare, andMedicaid—rose by a combined $5 billion (or 3 percent).
  • Spending by the Department of Defense dropped by $3 billion (or 6 percent), mostly in the area of procurement.

For other programs and activities, spending increased or decreased by smaller amounts.

Actual Surplus in April 2016: $106 Billion

The Treasury reported a surplus of $106 billion for April—$3 billion less than CBO estimated, on the basis of the Daily Treasury Statements, in its Monthly Budget Review for April 2016.

[click here to read the entire report]


>>>>> Scroll down to view and make comments <<<<<<




Permanent link to most recent post on this topic

Click here for Historical Releases Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted. You can also comment using Facebook directly using he comment block below.






Econintersect Economic Releases


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
Was Marx Right?
Angst in America, Part 5: The Crisis We Can’t Muddle Through
News Blog
What We Read Today 30 April 2017
Voice Recognition Elevator In Scotland
May 2017 Economic Forecast: Return to Normal Growth
Guanxi: How Business Is Done In China
Measuring Interest Rate Risk In The Very Long Term
2016 Small Business Credit Survey: A Significant Majority Relied On Personal Finances
How Economic Changes Affect Congressional Budget Office's Budget Projections
Three Public Relations Blunders And How Your Company Can Learn From Them
Infographic Of The Day: Cheat Sheet: NAFTA's Mixed Track Record Since 1994
Early Headlines: Trump Blames Dems And Constitution For Chaos, US Child Poverty, Winter Leaves North New England, Labour Gains In Polls, And More
Grading President Trump's First 100 Days: B!
The Most Important Gaming Platforms 2017
Earnings And Economic Reports: Week Starting 01 May 2017
Investing Blog
Technical Thoughts: Finding Contrarian Ideas
More People Have Access To Netflix Than A DVR
Opinion Blog
Investors: Super Size Me
How Our Addiction To Safety Could Lead To Another Financial Crisis
Precious Metals Blog
A New Age For Gold
Live Markets
28Apr2017 Market Close: Wall Street Closed Mostly Down On News The U.S. Economy Grew At Its Weakest Pace In Three Years, WTI Crude Settles In The Low 49 Handle
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government































 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2017 Econintersect LLC - all rights reserved