On Wednesday, the U.S. Treasury released the first budget report of the new federal fiscal year — and so far, so good. With total outlays of $291 billion and total receipts of $199 billion, the United States ran a budget deficit of $92 billion in October, down 24 percent on the year from a deficit of $120 billion in October 2012. However, about $8 billion worth of the deficit reduction can be attributed to timing, which brings the real improvement to about 17 percent. Total outlays for October fell 4.5 percent on the year, while total receipts increased nearly 8 percent.
But the budget cops aren’t celebrating. October’s deficit may have fallen on the year, but the Congressional Budget Office is expecting a full-year fiscal 2014 budget deficit of $750 billion — about 10 percent higher than the $680 billion deficit in fiscal 2013. In fiscal 2015, the deficit is expected to fall to $625 billion. Aggressive spending cuts put in place this year — which largely fall under the umbrella of sequestration — won’t balance the budget on their own.
Projections are just projections, though, and the actual numbers are likely to vary. Washington is gearing up for another round of budget and debt-ceiling negotiations shortly after the new year, and the next mid-year review could reveal a very different outlook for fiscal 2015.
Also on Wednesday, a joint budget committee met — which was established as part of the deal that re-opened the government in October — but seemed to produce few results. The meeting was reportedly dominated by the testimony of CBO director Douglas Elmendorf, who said that, “Improving or at least not worsening the long term budget outlook would be a good thing for the economy and our citizens.”
The committee has until December 13 to reach a budget agreement, but many are doubting that this deadline will be honored. Not only have congressional leaders proven themselves resistant to enforcement mechanisms, Politico reports that there are few immediate consequences to missing the deadline.
The panel is comprised of 29 members and is co-chaired by Representative Paul Ryan (R-Wis.) and Senator Patty Murray (D-Wash.). Each is a big shot in their own way, but the divide between Democrats and Republicans appears too wide to cross. Stan Collender, national direction for financial communications at Qorvis, told NPR that, “The first thing everybody has to understand is that the so-called grand bargain — the big deal — is a pure fantasy.”
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