March 26, 2017

Federal Budget & Deficit Facts in April

During April, the federal government incurred a deficit of $40.5 billion, according to the monthly release [.pdf] from the Treasury Department. While this amount is less than the monthly deficit recorded in April of fiscal year 2010, the deficit recorded throughout fiscal year 2011 is greater than the deficit recorded at this point in fiscal year 2010. In fact, the deficit in fiscal year 2011 is currently 8.1% greater than this point in fiscal year 2010.

The deficit in fiscal year 2011, which began in October, currently totals $869.9 billion, whereas the deficit at this point in fiscal year 2010 totaled $799.7 billion, which is a difference of $70.2 billion. This apparent growth in the deficit is a result of increased federal expenditures, despite an increase in federal revenues. In other words, the federal government has received more tax dollars this year, yet these tax dollars have not been able to offset increases in expenditures.

Individual income tax receipts in fiscal year 2011 currently totals $837.5 billion, whereas individual income taxes at this point in fiscal year 2010 totaled $718 billion, which is a difference of $119.5 billion. On the other hand, corporate income taxes for fiscal year 2011 currently totals $129.9 billion, whereas corporate income taxes at this point in fiscal year 2010 totaled $144.7 billion. As a result, receipts from individual income taxes have increased 14% thus far in fiscal year 2011, while corporate income receipts have decreased 10%.

In addition to decreased receipts from corporations in the current fiscal year, tax refunds from the federal government have also declined. Tax refunds to individuals in fiscal year 2011 currently totals $206.3 billion, whereas tax refunds to individuals at the same point in fiscal year 2010 totaled $217.2 billion, which is a difference of $10.9 billion. Changes to tax code, such as the expiration of the first-time home buyer tax credit, are responsible for decreased refunds to individuals in the current fiscal year.

Tax refunds to corporations have also decreased in the current fiscal year. Tax refunds to corporations in fiscal year 2011 currently totals $49.8 billion, whereas tax refunds to corporations at this point in fiscal year 2010 totaled $67.6 billion, which is a decline of $17.8 billion. Therefore, the federal government has reduced its amount of tax refunds to both individuals and corporations in the current fiscal year.

After subtracting tax refunds, the federal government’s revenue from individuals in the current fiscal year totals $631.2 billion, whereas the federal government’s revenue from individuals at the same point in fiscal year 2010 totaled $500.9 billion, which is a difference of $130.3 billion. This increase after subtracting tax refunds is similarly reflected in corporate revenues, which totals $80.1 billion as compared to $77.1 billion at the same point in fiscal year 2010. As a result, the federal government has received more revenue from both individuals and corporations in fiscal year 2011, albeit with a much greater increase from individuals. More specifically, individual revenues are 20.7% higher in fiscal year 2011, whereas corporate revenues are 3.7% higher.

Excluding individual and corporate income tax revenues, smaller sources of tax revenues have contrarily decreased in the current fiscal year. Other tax revenues in fiscal year 2011 are currently $23.4 billion less than the same point in fiscal year 2010. Considering this decline of $23.4 billion, as well as the increase of $133.2 billion from individual and corporate income taxes, the federal government’s total tax revenue has increased $109.8 billion in fiscal year 2011.

Although the federal government has increased revenues in fiscal year 2011, increased expenditures have more than offset these elevated revenues. Federal expenditures in fiscal year 2011 currently totals $2.17 trillion, whereas federal expenditures at this point in fiscal year 2010 totaled $1.99 trillion, which is a difference of $180 billion.

Among the 28 major federal agencies, 17 of these agencies have spent more thus far in fiscal year 2011 than at the same point in fiscal year 2010. The agencies with the greatest increases in expenditures include the Department of Health and Human Services with an increase of $21.7 billion, the Social Security Administration with an increase of $15.6 billion, and last but certainly not least is the Treasury Department with an increase of $123 billion in the current fiscal year.

The Treasury Department has two major categories of expenditures, which are interest on the deficit and everything else. Interest on the deficit in fiscal year 2011 currently totals $244.4 billion, whereas the interest on the deficit as this point in fiscal year 2010 totaled $224.4. Moreover, interest on the deficit accounts for 11.2% of the federal governments expenditures in fiscal year 2011. The Treasury Department’s expenditures on everything else has significantly increased $101 billion in the current fiscal year, which is discussed in detail here.

Aside from the federal agencies with the greatest increases in expenditures, the Labor Department has incurred the greatest reduction in expenditures among all the major agencies in 2011. The Labor Department has reduced its expenditures $21.6 billion in the current fiscal year as compared to the same period in fiscal year 2010. This decline is a result of fewer individuals who are eligible for unemployment benefits, as well as those who are eligible receiving less benefits. The International Assistance Program has the next greatest reduction in expenditures, with a decline of $1.4 billion in fiscal year 2011.

Altogether, federal expenditures have increased $180 billion, while federal tax revenues have increased $109.8 billion, which equals the annual growth in the deficit of $70.2 billion, as mentioned above.

Meanwhile, the total federal deficit now totals $14.34 trillion, according to the daily statement [.pdf] from the Treasury Department released Friday, May 20th. Since a federal law prohibits the federal deficit from exceeding $14.29 trillion, the federal government is now operating on IOUs while the 112th Congress continues to debate whether to raise the debt ceiling. As occurred in both 1996 and 2002, the Treasury Department has suspended payments to retirement funds until August 2nd, which is when the federal government would default if the 112th Congress does not raise the debt ceiling.

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