MONTHLY BUDGET REVIEW
Fiscal Year 1997
A Congressional Budget Office Analysis |
|
Based on the August Treasury Statement |
|
October 3, 1997 |
Lower-than-estimated outlays in August and September will pull the deficit
for fiscal year 1997 down below $25 billion. Receipts for the fiscal year
will be close to CBO's August estimate.
AUGUST RESULTS
(In billions of dollars)
|
|
August 1996 |
August 1997 |
Change |
|
Receipts |
100.0 |
103.5 |
3.5 |
|
Outlays |
141.8 |
138.1 |
-3.7 |
|
Deficit |
41.8 |
34.6 |
-7.2 |
|
|
Source: Department of the Treasury |
|
-
August receipts of $103.5 billion were up only $3.5 billion from a year
ago, held down in part by one fewer collection day this year, and close
to our estimate for the month.
-
August outlays of $138.1 billion were $3.7 billion below last year's level
and about $5 billion lower than estimated for the month. The largest shortfalls
in August outlays from expected levels were for the Postal Service fund
and the Department of Education.
-
The August deficit of $34.6 billion was down $7.2 billion from a year ago
and over $5 billion lower than expected.
FISCAL YEAR TO DATE
(In billions of dollars)
|
|
October-August
|
Change |
FY 1996 |
FY 1997 |
|
Receipts |
1,295.1 |
|
1,404.2 |
|
109.1 |
|
Outlays |
1,437.8 |
|
1,475.5 |
|
37.7 |
|
Deficit |
142.7 |
|
71.3 |
|
-71.4 |
|
|
Source: Department of the Treasury |
|
-
The cumulative deficit through August was $71.3 billion, one half of the
level last year for the same period.
CBO ESTIMATES FOR SEPTEMBER 1997
(In billions of dollars)
|
|
September 1996 |
September 1997 |
Estimated Change |
|
Receipts |
157.7 |
|
174.7 |
|
17.0 |
|
Outlays |
122.4 |
|
126.7 |
|
4.3 |
|
Surplus |
35.3 |
|
48.0 |
|
12.7 |
|
|
Source: Congressional Budget Office |
|
-
Daily Treasury statements for September indicate that receipts for the
month were about $174.7 billion, around $17 billion above last year's level,
boosted in part by one extra collection day this year.
-
Outlays are estimated to be $126.7 billion in September, up $4.3 billion
from a year ago but about $5 billion lower than expected.
-
The range of error around the estimate of a monthly deficit or surplus
is about $2 billion, based on past experience. This means that the actual
surplus that will be reported later this month by the Treasury should be
somewhere between $46 billion and $50 billion.
FY 1997 PROJECTIONS
(In billions of dollars)
|
|
Budget Resolution |
August Estimate |
Latest Estimate |
|
Receipts |
1,469 |
|
1,578 |
|
1,579 |
|
Outlays |
1,622 |
|
1,612 |
|
1,602 |
|
Deficit |
153 |
|
34 |
|
23 |
|
|
Source: Congressional Budget Office |
|
-
Receipts for the fiscal year will be close to the August CBO estimate of
$1,578 billion. As a percentage of GDP, receipts will be 19.8 percent,
just above the 1981 level of 19.7 percent.
-
Outlays are now expected to be about $10 billion lower than CBO estimated
in August. The shortfalls from CBO estimated outlays appear to be spread
widely among federal spending programs. The largest shortfalls include
such programs as Medicare, Medicaid, family support payments, the Postal
Service, and Defense-Military. As a percentage of GDP, outlays will be
20.1 percent, the lowest level since 1974.
-
The deficit for 1997 is now expected to be about $23 billion, plus or minus
$2 billion. As a percentage of GDP, the deficit would be only 0.3 percent,
the lowest level since 1970.
RECEIPTS THROUGH AUGUST
(In billions of dollars)
|
Major Source |
FY 1996 |
FY 1997 |
Percent Change |
|
Individual income |
587.7 |
|
659.3 |
|
12.2% |
Corporate income |
136.7 |
|
145.0 |
|
6.0% |
Social insurance |
466.0 |
|
491.8 |
|
5.5% |
Other |
104.6 |
|
108.2 |
|
3.5% |
|
Total |
1,295.1 |
|
1,404.2 |
|
8.4% |
|
Source: Department of the Treasury |
|
-
The primary source of higher receipts in 1997 is the individual income
and payroll tax collections, reflecting the surprisingly strong economy.
-
Corporate income tax collections in 1997 are up 6.0 percent from last year's
level.
OUTLAYS THROUGH AUGUST
(In billions of dollars)
|
Major Category |
FY 1996 |
FY 1997 |
Percent Change |
|
Defense-Military |
234.4 |
|
238.2 |
|
1.6% |
|
Social Security benefits |
314.3 |
|
328.1 |
|
4.4% |
|
Medicare and Medicaid |
266.7 |
|
281.6 |
|
5.6% |
|
Net interest on the public debt |
225.6 |
|
229.7 |
|
1.8% |
|
Other |
396.8 |
|
398.1 |
|
0.3% |
|
|
Total |
1,437.8 |
|
1,475.5 |
|
2.6% |
|
|
Source: Department of the Treasury |
|
-
The softness in August outlays reduced the rate of growth over last year
from 3.2 percent through July to 2.6 percent through August.
-
Outlay growth has been held down by $11 billion in spectrum auction receipts
and close to $14 billion in net receipts for deposit insurance programs.
Absent these offsetting receipts, outlay growth through August was 3.8
percent.
BORROWING FROM THE PUBLIC
(In billions of dollars)
|
|
October-August
|
Change |
1996 |
1997 |
|
Deficit |
142.7 |
71.3 |
-71.4 |
|
|
Other borrowing needs: |
Loan financing |
11.2 |
17.9 |
6.6 |
|
Operating cash balance |
-24.9 |
-32.1 |
-7.3 |
|
Other Items |
6.6 |
-0.5 |
-7.1 |
|
|
Borrowing from the public |
135.6 |
56.5 |
-79.1 |
|
|
Source: Department of the Treasury |
|
-
Borrowing from the public through August amounted to $56.5 billion, $79
billion below last year's comparable level and $14.8 billion lower than
the cumulative deficit of $71.3 billion. A reduction in operating cash
balances and other factors account for borrowing being less than the cumulative
deficit.
Prepared by James Blum and Rosemary Marcuss |