U.S. Budget Deficit: Smaller, But Not Small Enough
The United States budget deficit for July increased 40 percent compared to the month a year ago to $98 billion, according to the U.S. Treasury. Total spending increased 17 percent over the same period to $298 billion while total receipts increased 8.4 percent to $200 billion.
Though July’s data is somewhat ugly, the federal budget this year to date is more attractive than last year. Overall government revenues for the comparable year-to-date period are up about 14 percent while total outlays are down about 3 percent. This has reduced the total YTD budget deficit from $974 billion in the year-ago period to $607 billion in 2013. For the full year, the Treasury is estimating a budget deficit of $759 billion, a substantial improvement from the $1.1 trillion deficit recorded in fiscal 2013 (keep in mind the government’s fiscal year ends in September).
Income taxes collected this year to date from individuals are up 11 percent at $1.09 trillion, and income taxes collected from corporations are up 16 percent at $212 billion.
Even at a glance it’s easy to see that the the U.S. budget deficit this year is much tamer than last. A combination of tax increases and spending cuts — however awkward each has been — has helped steer the U.S. in the direction of fiscal responsibility.
But despite the budget’s improving condition, the Treasury is still engaged in extraordinary financing measures to avoid hitting the debt ceiling once again. “There are a number of factors including a strengthening economy and the impact of sequestration on the timing of outlays, together with the normal challenges of forecasting the payments and receipts of the U.S. government months into the future, that make it impossible to provide a precise estimate at this time on the duration of extraordinary measures,” the Treasury said in its fiscal third-quarter refunding statement.
“Based on current projections of cash flows and extraordinary measures,” Treasury continued, “it appears Treasury will have room to continue financing government operations so that Congress can address this when they return after Labor Day.”