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Based on the Monthly Treasury Statement for January and the Daily Treasury Statements for February | March 8, 2002 |
In the first five months of fiscal year 2002, the federal government
ran a deficit of about $68 billion, CBO estimates, compared with a surplus
of $26 billion in the same period last year. If, as expected, the President
signs the economic-stimulus legislation just passed by the Congress, the
government will end the fiscal year with a deficit of about $46 billion,
CBO anticipates.
JANUARY RESULTS (In billions of dollars) |
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Preliminary Estimate |
Actual | Difference | ||||
Receipts | 204 | 203 | -1 | |||
Outlays | 165 | 160 | -5 | |||
Surplus | 39 | 44 | 5 | |||
SOURCES: Department of the Treasury; CBO. | ||||||
The Treasury reported a surplus of $44 billion in January, about $5
billion more than CBO had projected on the basis of the Daily Treasury
Statements. The difference was almost entirely on the spending side
of the budget. Outlays were lower than CBO had anticipated for a number
of agencies and programs, including the Department of Agriculture, the
Department of the Treasury, and international security assistance programs.
ESTIMATES FOR FEBRUARY (In billions of dollars) |
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Actual FY2001 |
Preliminary FY2002 |
Estimated Change |
||||
Receipts | 110 | 97 | -14 | |||
Outlays | 159 | 172 | 13 | |||
Deficit | -48 | -75 | -27 | |||
SOURCES: Department of the Treasury; CBO. | ||||||
The deficit in February was about $75 billion, CBO estimates, $27 billion more than the deficit incurred in the same month last year. Revenues in February fell short of last February's total by about $14 billion; roughly $5 billion of that decline was attributable to the income tax cuts enacted in June. Another $5 billion resulted from an increase in refunds of individual income taxes this February, traditionally the first month in which taxpayers receive substantial refunds from filing the tax returns due on April 15.
On the outlay side of the budget, defense spending was approximately
$3 billion higher this February than last, CBO estimates. And together,
spending for Medicare, Medicaid, Social Security, and unemployment compensation
increased by $6 billion. Outlays are particularly high in February because
a substantial portion of refundable tax credits are paid in that month.
CBO estimates that those payments totaled $16 billion this February.
BUDGET TOTALS THROUGH FEBRUARY (In billions of dollars) |
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October-February
|
Estimated Change |
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FY2001 | FY2002 | |||||
Receipts | 792 | 766 | -25 | |||
Outlays | 766 | 835 | 69 | |||
Surplus or Deficit (-) | 26 | -68 | -94 | |||
SOURCES: Department of the Treasury; CBO. | ||||||
CBO estimates that the government recorded a deficit of $68 billion
for the first five months of fiscal year 2002, a sharp contrast to the
$26 billion surplus recorded for the same period last year. Outlays are
well above last year's level, while revenues are running about 3 percent
below last year's pace.
RECEIPTS THROUGH FEBRUARY (In billions of dollars) |
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October-February
|
Percentage Change |
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Major Source | FY2001 | FY2002 | |||||
Individual Income | 404 | 373 | -7.6 | ||||
Corporate Income | 59 | 63 | 6.2 | ||||
Social Insurance | 270 | 273 | 1.4 | ||||
Other | 59 | 57 | -3.1 | ||||
Total | 792 | 766 | -3.2 | ||||
SOURCES: Department of the Treasury; CBO. | |||||||
Receipts in the first five months of 2002 were lower than receipts in
the same period last year by $25 billion, or 3.2 percent. Individual income
tax receipts accounted for the biggest drop-off, declining by $31 billion,
or 7.6 percent. About half of that decline resulted from last June's cuts
in income tax rates, CBO estimates. Social insurance tax receipts grew
very slowly--by $4 billion, or 1.4 percent--compared with the same period
a year ago. Corporate tax receipts also grew by $4 billion, but that increase
occurred only because legislation enacted last year allowed firms to delay
$23 billion in payments from September to October (and thus to the current
fiscal year). Without that legislation, corporate tax receipts through
the first five months of the fiscal year would have been about $19 billion
lower than in the same period last year.
OUTLAYS THROUGH FEBRUARY (In billions of dollars) |
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October-February
|
Percentage Change
|
||||||||||
Major Category | FY2001 | FY2002 | Actual | Adjusteda | |||||||
Defense--Military | 114 | 128 | 12.8 | 10.0 | |||||||
Social Security Benefits | 174 | 184 | 5.8 | 5.8 | |||||||
Medicaid | 51 | 60 | 16.7 | 16.7 | |||||||
Medicare | 94 | 101 | 7.8 | 11.2 | |||||||
Unemployment Insurance | 12 | 19 | 66.4 | 66.4 | |||||||
Other Programs and Activities | 227 | 267 | 17.5 | 15.3 | |||||||
Subtotal | 672 | 760 | 13.1 | 12.4 | |||||||
Net Interest on the Public Debt | 94 | 75 | -19.9 | -19.9 | |||||||
Total | 766 | 835 | 9.0 | 8.5 | |||||||
SOURCES: Department of the Treasury; CBO. | |||||||||||
a. Excludes the effects of payments that were shifted because of weekends, holidays, or legislative action. | |||||||||||
Outlays in the first five months of 2002 were 9 percent higher than in the same period last year, CBO estimates. Adjusted for shifts in the dates of certain payments, that rate of growth was 8.5 percent; excluding net interest, it was more than 12 percent. For the fiscal year as a whole, CBO expects total outlays to increase by close to 8 percent.
Defense spending, which rose by 5.5 percent in 2001, is showing double-digit growth this year. Adjusted for payment shifts, defense spending has increased by 10 percent so far this year, with most of the additional money going for military personnel and operations and maintenance. Medicaid spending continues to grow rapidly--up by almost 17 percent so far this year. Outlays for Medicare rose at an 11.2 percent pace through February, but CBO expects that growth rate to be lower in the second half of the year because much of the change relative to the same period last year reflects new payment rates that took effect in April 2001. Payments for unemployment insurance totaled about $19 billion through February, CBO estimates, about $7 billion more than had been paid out at this point last year. Growth in other areas is spread among a variety of programs, including those of the Departments of Transportation, Education, and Agriculture and the Public Health Service.
Declining short-term interest rates have lowered the government's net
interest payments this year by almost 20 percent relative to the amount
paid in the first five months of 2001.
CBO'S PROJECTIONS FOR FISCAL YEAR 2002 (In billions of dollars) |
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As of January |
As of March 6 |
With Stimulus Bill | |||||
Receipts | 1,983 | 2,006 | 1,963 | ||||
Outlays | 2,003 | 2,001 | 2,010 | ||||
Surplus or Deficit (-) | -21 | 5 | -46 | ||||
On-budget deficit | -181 | -152 | -204 | ||||
Off-budget surplus | 160 | 157 | 157 | ||||
SOURCE: CBO. | |||||||
On March 6, CBO released updated baseline projections for 2002. It estimated
that in the absence of additional tax or spending legislation, the federal
government would run a slight surplus in 2002 ($5 billion) instead of the
small deficit (-$21 billion) previously projected. The major change in
the updated projections for 2002 was an increase of $23 billion in anticipated
revenues, reflecting higher projections of corporate profits in the near
term. Today, the Congress gave final approval to economic-stimulus legislation, including provisions that would extend unemployment benefits and allow businesses to depreciate newly acquired property more quickly. If that
legislation is signed by the President, as expected, it will lower receipts
in 2002 by an estimated $43 billion and raise outlays by more than $8 billion,
resulting in a total budget deficit for the year of about $46 billion.
NOTE: Unless otherwise indicated, the figures in this
report include the Social Security trust funds and the Postal Service fund,
which are off-budget. Numbers may not add up to totals because of rounding.
Prepared by Kathy Gramp, Chad Chirico, and Mark Booth. |