Not sure if this is ‘better than expected’ or ‘worse than expected’ but the hits keep on coming. Revenue was hit on both the corporate and individual side (social security) due to tax cuts. Without those hits the gap would have narrowed a bit.
- Spending and tax revenue both grew, but by equal amounts: about $140 billion. That left spending at $3.6 trillion and revenue at $2.3 trillion.
The one ‘improvement’ is since the economy grew, the deficit was ‘only’ 8.6% of GDP versus the prior year’s 8.9%.
I’d expect a deficit well in excess of a trillion in fiscal 2012 as well (Oct 2011-Sep 2012).
- The federal government ran an estimated $1.3 trillion budget deficit in fiscal 2011, the same amount as in the previous year, the Congressional Budget Office said Friday.
- In its monthly assessment of the government’s finances, the nonpartisan congressional scorekeeper said the $1.3 trillion deficit was equivalent to 8.6% of gross domestic product, down from 8.9% in fiscal 2010 but still the third-highest percentage of GDP recorded since 1945.
- Spending on education, commerce, housing and space programs fell, and spending on defense, Medicare, Medicaid and Social Security grew more slowly than usual.
- Not all tax receipt categories grew, however. Nor did all spending categories fall or moderate.
Corporate income tax revenue overall fell about 6% due to stimulus-based tax cuts that let companies accelerate their deductions. Similarly, social insurance tax receipts, which support Social Security and Medicare, fell 5.3% because of the payroll tax cut approved by Congress in December 2010.
- The national debt now stands at $14.9 trillion and interest payments on the debt shot up last year to $266 billion.