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CBO: US Deficit Slumped in October and November Compared to Last Year

On December 6th, CBO (Congressional Budget Office) published its projections concerning federal government budget in October and November. According to their estimates, the federal government ran a budget deficit of $231 billion for the first two months of fiscal year 2014, $61 billion less (-21%) than the shortfall recorded in October and November of last year.

 

More from CBO:

 

The federal government ran a budget deficit of $231 billion for the first two months of fiscal year 2014, $61 billion less than the shortfall recorded in October and November of last year, CBO estimates.
 
Receipts for the first two months of fiscal year 2014 totaled $380 billion, CBO estimates—$34 billion more than receipts during the same period last year.
 
Outlays for the first two months of fiscal year 2014 were $27 billion less than they were during the same period last year, CBO estimates.

 
 
These figures show that the deficit keeps on falling sharply so that the most recent CBO projection which puts the fiscal 2014 deficit at 3.3% of GDP, down from 4.1% in fiscal 2013, should be revised downward in the coming months. The fact is that the decrease of outlays would have been slightly larger if not for shifts in the timing of certain payments from December to November (because December 1 fell on a weekend in both years).

CBO: Debt Ceiling May Be Delayed Until June 2014

Congress voted last month to end the government shutdown and to extend the debt limit through Feb. 7, 2014. Then, on February 8, the U.S. Treasury Department could use “extraordinary measures”, the special accounting maneuvers that let it keep paying the country’s bills without going over the debt limit, to avoid a default.

 

By CBO’s estimate, the Treasury might be unable to fully pay its obligations starting in March, but depending on the timing and magnitude of tax refunds and receipts in February, March, and April, the Treasury might be able to continue borrowing into May or early June.

Treasury Statement: August Figures Confirm that US Deficit Will Be Close to 4% of GDP in Fiscal 2013

According to the Monthly Treasury Statement, the US government reported a deficit of $148 billion in August. These figures were slighlty higher than the $146 billion deficit expected by the CBO and by economists surveyed by Bloomberg.

 

Revenue climbed 3.6% YoY to $185.3B, while outlays plunged 9.8% YoY to $369.4B. As a consequence, in August, the deficit decreased by 22% compared to last year at the same period. This reduction could be larger to the textent that:

 

Since September 1, 2013, the normal date for these expenditures, fell on a non-business day, outlays for military active duty and retirement, Veterans’ benefits, Supplemental Security Income and Medicare payments to Health Maintenance Organizations moved to August 30, 2013.

 

The August budget gap brings the deficit for the 2013 fiscal year to $755 billion almost 35% below the $1.16 trillion for the first 11 months of fiscal 2012. In this context, the Treasury Department remains on course for its first full-year shortfall below $1 trillion since 2008. Therefore, the deficit could only reach 4% of GDP in fiscal 2013 as predicted by CBO (Congressional Budget Office).

 

 

CBO: US Deficit Could Only Reach 4% in Fiscal 2013

Yesterday, the CBO (Congressional Budget Office) published its Monthly Budget Review for August 2013. It shows that revenues have risen significantly in 2013 and deficit will be less than half as large as the shortfall in 2009, which was 10.1 percent of GDP.

 

More from CBO:

 

The federal government ran a budget deficit of roughly $750 billion for the first 11 months of fiscal year 2013, CBO estimates—a reduction of more than $400 billion from the shortfall recorded for the same period last year. Revenues have risen significantly, accounting for more than two-thirds of the decline in the deficit. The deficit for all of fiscal year 2013 is expected to be smaller than the 11-month figure, as revenues are likely to outpace outlays in September.

 

In this context, if September surplus is above last year at the same period ($75 billion), the annual deficit for fiscal 2013 could be close to the most recent CBO estimate which is $642 billion. Therefore, relative to the size of the economy, the deficit this year will reach almost 4% percent of GDP.