–Sees FY2012 Deficit Of -$1.1 Trln Vs -$1.3 Trln A Year Ago

WASHINGTON (MNI) – The following are excerpts from the
Congressional Budget Office’s Monthly Budget Review published Friday:

The federal budget deficit was about $1.1 trillion in fiscal year
2012, CBO estimates, approximately $200 billion less than the shortfall
recorded in 2011. At 7.0 percent of gross domestic product, the 2012
deficit was down from 8.7 percent in 2011 and 9.0 percent in 2010 but
greater than in any year between 1947 and 2008. The estimated 2012 total
reflects the shift of some payments from fiscal year 2012 into fiscal
year 2011 (that is, from October 2011 to September 2011, because October
1 fell on a weekend); without that timing shift, the deficit in 2012
would have been about $30 billion higher. CBO’s deficit estimate is
based on data from the Daily Treasury Statements; the Treasury
Department will report the actual deficit for fiscal year 2012 later
this month.

The Treasury reported a deficit of $191 billion for August, $1
billion less than the amount CBO had projected on the basis of the Daily
Treasury Statements.

The Treasury recorded a surplus of $75 billion in September 2012,
CBO estimates, in contrast with the $63 billion deficit incurred in the
same month last year. Shifts in the timing of certain payments
influenced the results in both years: Payments totaling $31 billion were
shifted from October 2011 to September 2011, while payments totaling $58
billion were shifted from September 2012 to August 2012. Adjusted for
those timing shifts, the surplus in September 2012 would have been $17
billion, in contrast with a deficit of $32 billion in September 2011.

Adjusted for timing shifts, outlays last month would have been $26
billion (or 10 percent) less than the amount recorded in September of
last year, CBO estimates. Net payments to Fannie Mae and Freddie Mac
were $7 billion lower than in the same month last year, because the
government did not provide cash infusions to the two entities this
September. The government recorded receipts of $7 billion in September
from the sale of stock in American International Group; no such sale
occurred in September 2011. Outlays for unemployment benefits were $6
billion lower in September than they were a year ago.

Adjusted for the effects of shifts in the timing of some payments,
spending for military activities also declined, by $5 billion, largely
because of smaller payments to contractors for goods and services. In
contrast, spending for Social Security benefits was $4 billion higher in
September 2012 than in September 2011.

Receipts this September were about $23 billion (or 9 percent)
higher than those in September 2011, CBO estimates. Net receipts from
the corporate income tax rose by $17 billion (or 44 percent), reflecting
higher quarterly tax payments. Net receipts from individual income and
payroll taxes rose by $5 billion (or 3 percent). Withheld receipts from
those sources fell by $1 billion, but they would have risen if not for
the effects of the calendar: September 2012 had two fewer business days
than September 2011. Nonwithheld receipts of individual income and
payroll taxes, mainly quarterly estimated payments of 2012 taxes, rose
by $3 billion (or 6 percent). And, together, changes in refunds of
individual income taxes and in collections of payroll taxes for
unemployment insurance boosted receipts by $2 billion.

The federal deficit was just under $1.1 trillion in 2012, CBO
estimates, $207 billion lower than the 2011 deficit and $38 billion less
than the agency projected in August. Outlays appear to have been $23
billion lower and revenues $15 billion higher than CBO expected.

** MNI Washington Bureau: 202-371-2121 **

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