MONTHLY BUDGET REVIEW
Fiscal Year 1998
A Congressional Budget Office Analysis |
|
Based on the Monthly Treasury Statement for December
and the Daily Treasury Statements for January |
|
February 6, 1998 |
A surplus of $22 billion is estimated for January, which would reduce
the deficit for the first four months of the fiscal year to $28 billion
below last year's comparable level. If revenue growth continues to be strong,
a surplus is likely to result for the fiscal year.
DECEMBER RESULTS AND CBO ESTIMATES FOR JANUARY
(In billions of dollars)
|
|
December Actual |
January Estimate |
Estimated Change |
|
Receipts |
168.0 |
|
161.0 |
|
-7.0 |
|
Outlays |
154.4 |
|
139.0 |
|
-16.4 |
|
Surplus |
13.6 |
|
22.0 |
|
9.4 |
|
|
Source: Department of the Treasury and Congressional
Budget Office. |
|
-
The December surplus of $13.6 billion was very close to CBO's estimate
of $13.7 billion for the month.
-
A surplus of $22 billion is estimated for January based on the Daily Treasury
Statements. Receipts will be relatively high because of quarterly estimated
individual income tax collections, while outlays will be unaffected by
calendar quirks.
-
The range of error around the CBO estimates 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 $20 billion and $24 billion.
COMPARISON WITH LAST YEAR
(By fiscal year, in billions of dollars)
|
|
October-January
|
Estimated Change |
1997 |
1998 |
|
Receipts |
496.7 |
547.4 |
50.7 |
|
Outlays |
542.5 |
564.1 |
21.5 |
|
Deficit |
45.8 |
17.7 |
-28.2 |
|
|
Source: Department of the Treasury and Congressional
Budget Office. |
|
-
Receipts for the first four months of the fiscal year are estimated to
be up 10 percent over the amount collected a year ago, reflecting the continuing
strong growth in the economy.
-
Outlays for the first four months are estimated to be 4 percent above last
year's level, resulting in a cumulative deficit that is $28 billion below
the level recorded a year ago.
RECEIPTS THROUGH JANUARY
(By fiscal year, in billions of dollars)
|
Major Source |
October-January
|
Percent Change |
1997 |
1998 |
|
Individual Income |
246.5 |
272.3 |
10.5 |
|
Corporate Income |
47.0 |
55.2 |
17.5 |
|
Social Insurance |
165.5 |
177.9 |
7.5 |
|
Other |
37.7 |
41.9 |
11.3 |
|
|
|
Total |
496.7 |
547.4 |
10.2 |
|
|
Source: Department of the Treasury and Congressional
Budget Office. |
|
-
Despite one less working day this year, receipts in January are estimated
to be up nearly $12 billion from last year's collections for the month.
For the year to date, receipts are up nearly $51 billion over last year's
pace.
-
January receipts are boosted by nonwithheld individual income tax payments.
Total individual income tax collections through January are estimated to
be up 10.5 percent over last year's pace.
OUTLAYS THROUGH JANUARY
(By fiscal year, in billions of dollars)
|
Major Category |
October-January
|
Percent Change |
FY 1997 |
FY 1998 |
|
Defense-Military |
88.0 |
|
88.2 |
|
0.3 |
|
Social Security Benefits |
117.7 |
|
122.2 |
|
3.9 |
|
Medicare and Medicaid |
102.5 |
|
107.4 |
|
4.7 |
|
Net Interest on the Public Debt |
83.7 |
|
84.2 |
|
0.6 |
|
Other |
150.6 |
|
163.0 |
|
8.2 |
|
|
|
Total |
542.5 |
|
565.1 |
|
4.1 |
|
|
Source: Department of the Treasury and Congressional
Budget Office. |
|
-
Outlays through January are estimated to be 4.1 percent above last year's
level for the same period, which is consistent with CBO's 4.3 percent growth
estimate for the fiscal year.
-
About $8 billion of January payments were made in December because January
1 was a holiday, but an equal amount of outlays was shifted from February
to January because February 1 was a Sunday, another non-working day.
FY 1998 PROJECTIONS
(In billions of dollars)
|
|
Budget Resolution |
OMB February |
CBO January |
|
Receipts |
1,602 |
|
1,658 |
|
1,665 |
|
Outlays |
1,692 |
|
1,668 |
|
1,670 |
|
Deficit |
90 |
|
10 |
|
5 |
|
|
Source: Congressional Budget Office. |
|
-
The Office of Management and Budget (OMB) estimates a deficit of $10 billion
for fiscal year 1998, nearly $5 billion higher than CBO's January estimate.
OMB's higher deficit estimate is largely because of a lower estimate of
receipts.
-
If revenue growth over last year continues to be strong, CBO's higher receipt
estimate is likely to be exceeded, and a surplus for the year could result.
-
The historical track record for CBO and OMB at this point in the fiscal
year shows that estimates for total receipts and outlays could each be
off the mark by 2 percent. If the estimating errors are not offset, the
final budgetary outcome could be different by tens of billions of dollars.
Prepared by James Blum and Rosemary Marcuss. |