–Estimates Treasury Will Record $283b Deficit 1st 2 months FY’2011

WASHINGTON (MNI) – The following are excerpts from the U.S.
Congressional Budget Office’s December Budget Review publisjed Monday
with it’s estimate for last month’s deficit. The U.S. Treasury
Department is scheduled to release its monthly statement December 10:

The federal budget deficit was $283 billion for the first two
months of fiscal year 2011, CBO estimates, $14 billion less than the
shortfall recorded through November of last year. Outlays and revenues
alike are higher than they were last year at this time, by about 2
percent and 9 percent, respectively.

The deficit in November was $142 billion, CBO estimates, $22
billion more than the deficit in the same month last year. However, if
the outlay figures were adjusted for shifts in the timing of certain
payments, the deficit for November 2010 would be $4 billion less than
the shortfall in November 2009.

CBO estimates that receipts in November 2010 totaled $148 billion,
$14 billion (or 11 percent) more than receipts in November 2009.
Individual income and payroll taxes combined rose by $15 billion (or 13
percent), largely because of an $11 billion (or 8 percent) rise in
withheld taxes, the result of both the strengthening economy and the
effects of an additional working day in November this year. An increase
of $1 billion in nonwithheld individual income and payroll taxes and a
decline of $3 billion in individual income tax refunds also contributed
to the rise in individual and payroll receipts.

The expiration of the estate tax at the end of 2009 reduced
receipts by about $1 billion this November compared with collections in
November 2009. Because estate tax payments typically occur about nine
months after an individuals death, the reduction in receipts from the
expiration of the estate tax first became apparent in October and will
continue throughout fiscal year 2011.

Outlays were $37 billion higher in November than during the same
month last year. That increase is mainly attributable to a shift in
payment dates. Because November 1, 2009, fell on a weekend, $27 billion
in payments that ordinarily would have been made in November were
instead made at the end of October 2009. No such shift occurred this
year.

Adjusted for that calendar effect, outlays for the month would have
been $11 billion higher than in November 2009. Spending for defense
increased by $7 billion, expenditures for Medicaid increased by $3
billion, and outlays for Social Security were up by $2 billion. Those
increases were partially offset by net decreases of $4 billion in
spending for federal deposit insurance and $2 billion in outlays for the
Troubled Asset Relief Program.

CBO estimates that the Treasury will record a deficit of $283
billion for the first two months of fiscal year 2011, $14 billion less
than the deficit recorded for the same period last year. Revenues rose
by about $25 billion (or 9 percent); outlays increased by $11 billion
(or 2 percent).

** Market News International Washington Bureau: 202-371-2121 **

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