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Deficit Tracker

Thursday, March 14, 2019

Large and sustained federal budget deficits are harmful to the fiscal health of the United States, yet policymakers struggle with reining in the red ink. Even as the U.S. economy expands, the federal government continues to run large and growing budget deficits that will soon exceed $1 trillion per year. It is an ominous trend. BPC’s economic policy team analyzes the government’s running budget deficit and updates the Deficit Tracker every month. 

Tracking the Federal Deficit:  April 2019

The Congressional Budget Office reported that the federal government generated a $161 billion surplus in April, the seventh month of Fiscal Year 2019, for a total deficit of $531 billion so far this fiscal year. April’s surplus is 33 percent ($54 billion) less than the surplus recorded a year earlier in April 2018. If not for timing shifts of certain payments, the surplus would have been 5 percent ($8 billion) smaller than the surplus in April 2018. Total revenues so far in Fiscal Year 2019 increased by 2 percent ($36 billion), while spending increased by 6 percent ($135 billion), compared to the same period last year.

Analysis of Notable Trends this Fiscal Year to Date: Income tax refunds were down by 5 percent ($12 billion) compared to last tax season, contrary to many analysts’ expectations. Further, outlays from the refundable earned income and child tax credits increased by 12 percent ($9 billion) versus last year, reflecting expansions enacted in the Tax Cuts and Jobs Act of 2017. Net interest payments on the public debt continued to rise, up 13 percent ($27 billion) compared to last year, largely as a result of higher interest rates and the nation’s steadily growing debt burden.

Tracking the Federal Deficit:  March 2019 

The Congressional Budget Office (CBO) reported that the federal government generated a $149 billion deficit in March, the sixth month of Fiscal Year 2019, for a total deficit of $693 billion so far this fiscal year. March’s deficit is 29 percent ($60 billion) less than the deficit recorded a year earlier in March 2018. If not for timing shifts of certain payments, the deficit would have been 9 percent ($14 billion) smaller than the deficit in March 2018. Total revenues so far in Fiscal Year 2019 increased by 0.6 percent ($9 billion), while spending increased by 5 percent ($103 billion), compared to the same period last year.

Analysis of Notable Trends this Fiscal Year to Date: Customs duties increased by 86 percent ($16 billion) compared to last year. On the spending side, outlays for Social Security, Medicare, and Medicaid increased by a combined 4 percent ($26 billion, $10 billion, and $5 billion, respectively). Department of Defense spending rose by 9 percent ($28 billion), and net interest payments on the national debt were up by 13 percent ($22 billion), largely due to interest rates on short term debt being substantially higher now than they were during the first half of Fiscal Year 2018

Tracking the Federal Deficit:  February 2019 

The Congressional Budget Office (CBO) reported that the federal government generated a $227 billion deficit in February, the fifth month of Fiscal Year 2019, for a total deficit of $537 billion so far this fiscal year. February’s deficit is 5 percent ($12 billion) higher than the deficit recorded a year earlier in February 2018. Total revenues so far in Fiscal Year 2019 decreased by 0.3 percent ($4 billion), while spending increased by 8.5 percent ($142 billion), compared to the same period last year.

Analysis of Notable Trends this Fiscal Year to Date: Income tax refunds were down by 10 percent ($10 billion) from October-February 2019 compared to the same period in Fiscal Year 2018, and corporate income tax receipts were down by 19 percent ($14 billion) from October-February 2019 relative to the same period in Fiscal Year 2018. The dip in corporate revenues is primarily attributable to the Tax Cuts and Jobs Act of 2017. On the spending side, Department of Homeland Security outlays decreased by 31 percent ($11 billion) due to a relative decrease in disaster spending versus last year. Conversely, net interest payments on the national debt were up 15 percent ($20 billion) from October-February 2019 compared to the same period in Fiscal Year 2018.

Tracking the Federal Deficit: December 2018 

The Congressional Budget Office (CBO) reported that the federal government generated an $11 billion deficit in December, the third month of Fiscal Year 2019, for a total deficit of $317 billion so far this fiscal year. If not for timing shifts of certain payments, the deficit in December would have been roughly $32 billion, according to CBO. December’s deficit is 52 percent ($12 billion) lower than the deficit recorded a year earlier in December 2017. Total revenues so far in Fiscal Year 2019 increased by 0.1 percent ($2 billion), while spending increased by 9.4 percent ($93 billion), compared to the same period last year. 

Analysis of Notable Trends in December 2018: Revenue from customs duties spiked by 83 percent ($8 billion) from October-December 2018, relative to the same period in 2017, due to the administration’s imposition of new tariffs. Conversely, corporate income tax revenue declined by 15 percent ($9 billion) from October-December 2018 relative to the same period in 2017. This dip mainly reflects the reduction of corporate tax rates enacted in the Tax Cuts and Jobs Act of 2017. On the spending side, interest payments on the federal debt in December 2018 rose by 47 percent ($11 billion) relative to December 2017.    

Tracking the Federal Deficit: November 2018

The Congressional Budget Office (CBO) reported that the federal government generated a $203 billion deficit in November, the second month of Fiscal Year 2019, for a total deficit of $303 billion so far this fiscal year. If not for timing shifts of certain payments, the deficit in November would have been roughly $158 billion, according to CBO. November’s deficit is 46 percent ($64 billion) higher than the deficit recorded a year earlier in November 2017. Total revenues so far in Fiscal Year 2019 increased by 3 percent ($14 billion), while spending increased by 18 percent ($115 billion), compared to the same period last year.

Analysis of Notable Trends in November 2018: Department of Homeland Security spending fell by 46 percent ($4 billion) relative to November 2017, reflecting a decrease in spending on disaster relief. Conversely, Social Security spending (benefit payments) increased by 5 percent ($4 billion) compared to November 2017.  

Tracking the Federal Deficit: October 2018

The U.S. Department of Treasury reported that the federal government generated a $100 billion deficit in October, the first month of Fiscal Year 2019. October’s deficit is 59 percent ($37 billion) higher than the deficit recorded a year earlier in October 2017. If not for timing shifts of certain payments, the deficit in October would have been roughly $54 billion, according to the Congressional Budget Office. Total revenues increased by 7 percent ($17 billion), while spending increased by 18 percent ($55 billion), compared to a year earlier.

Analysis of Notable Trends in October 2018: interest payments on the debt increased by 30 percent ($7 billion), compared to a year earlier.   

End of Fiscal Year 2018

This entry reflects the U.S. Treasury Department’s official end-of-year spending, revenue, and deficit figures for Fiscal Year 2018, as released in its Final Monthly Treasury Statement for Fiscal Year 2018.  

The total deficit for FY 2018 is $779 billion, with total spending clocking in at $4.1 trillion and total revenue at $3.3 trillion. The deficit grew by 17 percent ($113 billion) compared to FY 2017 and is the highest federal deficit in six years (since FY 2012). While spending grew by about 3 percent ($127 billion) in FY 2018, revenue grew by less than 1 percent ($14 billion). Disturbingly, federal interest payments on the debt spiked to $372 billion — up 20 percent ($62 billion) from FY 2017 — reflecting the largest year-over-year increase in over a decade (both in terms of nominal and inflation-adjusted dollars).   

October 5, 2018

The Congressional Budget Office reports that the federal government generated a $782 billion deficit for Fiscal Year 2018, about 17 percent ($116 billion) higher than the deficit for FY 2017. However, about $44 billion in payments that normally would have been included in FY 2018, which ended Sept. 30, fell on a weekend and instead were made in FY 2019. If not for these payment timing shifts, the FY 2018 deficit would have been even larger, estimated at $826 billion. Revenues in FY 2018 remained almost entirely flat, growing by less than 1 percent. While some revenue sources such as individual income tax collection grew by about 6 percent ($96 billion), others such as corporate income tax collection shrank dramatically by about 31 percent ($92 billion). As revenue stagnated, federal spending continued to climb by 3 percent ($129 billion). Spending on the three largest mandatory programs — Social Security, Medicare, and Medicaid — rose by 4 percent ($73 billion). In continuation of a disturbing trend, interest payments on the federal debt were the fastest growing portion of the budget, up 20 percent ($62 billion) from FY 2017. Total interest payments on the federal debt for FY 2018 were $371 billion, nearly as much as the federal government spent on the Medicaid program over the same period (all spending figures adjusted by CBO to remove the effects of timing shifts).     

September 10, 2018

The federal government produced a monthly budget deficit of $211 billion in August, up from $108 billion during the same month last year. The cumulative Fiscal Year 2018 deficit now stands at $895 billion, exceeding by more than $100 billion CBO’s latest projection for that period. It is important to note that due to the calendar, payments of about $68 billion normally made in September were made in August. For this reason, August’s cumulative deficit is larger than it otherwise would have been, which will be offset by a lower deficit in September.

This year’s cumulative deficit is 33 percent ($222 billion) higher than for the same period last year. According to CBO, while federal revenues have increased by 1 percent ($19 billion) over the first 11 months of FY 2018, federal outlays have increased by 7 percent ($240 billion). Outlays rose across all major categories, including interest spending, defense spending, and spending on major entitlement programs. Key drivers of the increased deficit year-over-year in the month of August alone (adjusted by CBO to remove the effects of timing shifts) were: interest spending up 25 percent ($7 billion); defense spending up 10 percent ($5 billion); and Social Security and Medicare spending up 5 percent and 7 percent respectively ($4 billion each).  

August 7, 2018

The federal government generated a monthly budget deficit of $75 billion in July, bringing the cumulative Fiscal Year (FY) 2018 deficit to $682 billion. This year’s deficit is 20 percent ($116 billion) higher than last year’s cumulative deficit over the same period. Cumulative interest payments on the federal debt increased again this month relative to the same period last year, totaling $309 billion so far this fiscal year. The Congressional Budget Office attributes this 19 percent ($48 billion) year-over-year increase in interest spending to several factors: a higher rate of inflation, higher interest rates, and a larger debt burden. Other increases in spending compared to July 2017 included a 5 percent increase in spending on Social Security ($4 billion) and an 8 percent increase in defense spending ($3 billion). Total revenues for the month were down about 3 percent ($7 billion). Fiscal year to date, revenues have increased by about 5 percent ($105 billion), despite a 28 percent ($66 billion) drop in corporate tax collections. This drop has been more than offset by an 8 percent ($104 billion) increase in individual income tax collections so far this fiscal year.   

July 10, 2018

In June, the federal government produced a monthly budget deficit of $75 billion, bringing the cumulative Fiscal Year 2018 deficit to $607 billion. This year’s deficit is $84 billion higher than last year’s cumulative deficit over the same period. The primary reason on the spending side is interest payments, which have increased by 17 percent ($39 billion) through the month of June compared to the same period in 2017. Spending on the three largest mandatory programs—Social Security, Medicare, and Medicaid—has increased by 4 percent ($115 billion) versus the comparable period in 2017. On the revenue side, corporate income taxes are 28 percent lower ($62 billion) compared to the same period in 2017. About a third of this dip occurred in June, which CBO attributes to a decrease in corporate tax collection largely due to the implementation of the Tax Cuts and Jobs Act of 2017. Provisions lowering the corporate tax rate and expanding the ability of corporations to immediately deduct the full value of equipment purchases particularly had an impact on the revenue decline. But overall revenues have increased slightly compared to last year, driven by individual income and payroll tax collections, which rose by 5 percent ($105 billion) compared to the same period in 2017. This increase is partially attributable to a growing workforce and increases in wages and salaries subject to taxation.

June 7, 2018

The federal government produced a monthly budget deficit of $144 billion in May, up from $88 billion during the same month last year. May’s shortfall brings the cumulative Fiscal Year 2018 deficit to $530 billion, 22 percent higher than last year’s cumulative deficit over the same period. CBO attributes the increased deficit through last month in part to increases in interest spending, up 15 percent (or $32 billion) compared to this point last year. In the month of May alone, interest payments rose by 26 percent (or $7 billion) compared to May 2017, perhaps partially reflecting the trend of rising rates on U.S. Treasury securities. Also, corporate tax collections through May fell by 25 percent (or $42 billion) compared to the same period in FY2017. Conversely, individual income and payroll tax payments through May were up 6 percent (or $109 billion) compared to the same point last year. Spending increases in Medicare, Medicaid, defense, and other programs also contributed to the year-over-year deficit increase in FY2018 to date.

May 7, 2018

As usual, April produced a monthly budget surplus, as the government received hundreds of billions of dollars in tax returns during the month. An extraordinary $218 billion surplus in April prompted the cumulative 2018 budget deficit to shrink to $382 billion so far this fiscal year. Last year, the government had accrued a smaller $344 billion deficit through April, and the year before it was even lower. CBO partly attributes this year’s larger deficit to increases in interest spending (up 14 percent vs. last year), Department of Homeland Security spending (mainly disaster relief), as well as increases in spending on Social Security and defense. At the same time, revenues are up overall compared to last year, due mainly to an 8 percent increase from individual income and payroll taxes. Conversely, corporate income taxes declined precipitously compared to last year (by 22 percent), which may reflect behavior influenced by the recent tax legislation.

Methodological Note:

The monthly tracker entries report preliminary spending, revenue, and deficit data from CBO’s Monthly Budget Reviews. These summaries are released on the fifth business day of every month and preview the release of official budget data from the U.S. Department of Treasury, which follows on the eighth business day of every month (except end-of-year data, which tends to be released later in October). Historically, CBO’s preliminary data is accurate, often differing from Treasury’s final figures by only a few billion dollars, if at all. For example, CBO preliminarily reported that the total Fiscal Year 2018 deficit was $782 billion in their September 2018 review, less than 1 percent ($3 billion) off the official figure of $779 billion that Treasury later reported.

The deficit tracker graphic is updated retroactively with official Treasury data, whereas the monthly text entries are not.   

Note: Due to the government shutdown, the Monthly Treasury Statement for December 2018 has been delayed. Thus, while the deficit tracker graphic has been updated with data from the Congressional Budget Office, it will not be updated again with final treasury figures until the government reopens and Treasury produces a report for December 2018.