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Monthly Budget Review i (May 2010)

handle is hein.congrec/cbo07059 and id is 1 raw text is: MOINTHLY BLDGET REVIEW A Congresionai Budg et Office Anaiysis Based on the Monthly Treasury Statement for November and the Daily Treasury Statements for December The federal budget deficit was about $390 billion in the first quarter of fiscal year 2010, CBO estimates $56 billion more than the shortfall in the same period in fiscal year 2009. Outlays were slightly lower than they were last year at this time, but revenues have fallen by about 11 percent. Later this month, CBO will issue new budget projections for 2010 and the following 10 years. NOVEMBER RESULTS The Treasury reported a deficit of $120 billion in November, about $5 billion more than CBO projected on the basis of the Daily Treasury Statements. The difference occurred primarily because of greater-than- expected spending for Treasury and Justice programs. ESTIMATES FOR DECEMBER (Billions of dollars) Actual Preliminary Estimated FY 2009 2010 Change Receipts Outlays Deficit (-) Sources: Department ofthe Treasury; CBO. The deficit in December was $92 billion, CBO estimates, about $40 billion more than the deficit recorded in December 2008. Adjusted to eliminate variation attributable to shifts in the timing of certain payments, the deficit was about $11 billion greater than it was the same month last year. This is the second consecutive December that the federal government will record a budget deficit. Typically, that month yields a budget surplus because most corporations make quarterly income tax payments and withholding for individuals is relatively high owing to year-end bonuses and seasonal employment. CBO estimates that federal receipts in December declined by $18 billion, or 8 percent, relative to receipts in December 2008. Withholding for individual income and payroll taxes accounted for most of the total decline; those receipts were about $13 billion (or 8 percent) lower than those in the prior year. More than half of that decline is attributable to provisions of the American Recovery and Reinvestment Act of 2009 (ARRA) and the effects of the calendar (there was an additional Monday in December 2009, as compared with December 2008). Net corporate income tax receipts fell by $6 billion (or 13 percent) relative to those last December. That decline was the smallest drop in corporate receipts in the last month of a quarter since the recession began in December 2007. Those declines were partially offset by increases in other revenues, which rose by $2 billion (or 14 percent). Outlays in December were $22 billion (or 8 percent) higher than spending in the same month a year ago. Several factors contributed to that increase. The shifting of payments because of weekends or holidays increased outlays by almost $40 billion in December 2009. Similar timing shifts increased outlays in December 2008 by $11 billion. The federal government made $13 billion in cash payments to Fannie Mae this December (net of dividends); no payments were made in the same month last year. Outlays for unemployment benefits increased by $8 billion from the amount a year earlier (partially because of recent legislation that temporarily extended benefits), and spending for net interest on the public debt grew by $7 billion. Outlays for both Social Security (adjusted for timing shifts) and Medicaid were up by $5 billion. In contrast, net receipts for the Federal Deposit Insurance Corporation (FDIC) rose sharply, totaling $44 billion this December, $41 billion more than the amount in the same month last year, in response to a requirement that institutions prepay insurance premiums that would have been due over the next three years. Spending for the Troubled Asset Relief Program (TARP) declined from $21 billion in December 2008 to $4 billion in 2009. BUDGET TOTALS THROUGH DECEMBER (Billions of dollars) Actual Preliminary Estimated FY 2009 FY 2010 Change Receipts Outlays Deficit (-) Sources: Department ofthe Treasury; CBO. CBO estimates that the Treasury will record a deficit of $389 billion for the first three months of fiscal year 2010, compared with a deficit of $332 billion incurred in the same period last year. 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. January 7, 2010

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