–FY2012 YTD Federal Govt Deficit Now At -$777 Billion

WASHINGTON (MNI) – The following are excerpts from the
Congressional Budget Office monthly budget review published Friday:

The federal government incurred a budget deficit of almost $780
billion in the first half of fiscal year 2012, CBO estimates$53 billion
less than the shortfall during the same period last year. Revenues were
about 4.5 percent higher and outlays slightly lower than the amounts
recorded in the first six months of fiscal year 2011.

The Treasury reported a deficit of $232 billion for February, about
$3 billion more than CBO’s estimate based on the Daily Treasury
Statements.

CBO estimates that the deficit in March 2012 was $196 billion,
about $8 billion more than the deficit in the same month a year earlier.

Receipts in March of this year were $21 billion (or 14 percent)
higher than those in March 2011, CBO estimates. More than half of the
gain can be attributed to lower individual income tax refunds (which
were down by $12 billion, or 20 percent). Refunds were lower in large
part because some that ordinarily would have been recorded in March were
reported at the end of February.

Net receipts from corporate income taxes were up $7 billion in
March, primarily because final payments of 2011 tax liabilities were
higher than they were a year ago. (March is the month when most
corporations made final tax payments based on their 2011 liability.)

Amounts withheld for income and payroll taxes were also up — by $4
billion. That increase indicates continued growth in wages and salaries
and would have been slightly higher except for the fact that March 2012
had one fewer business day than March 2011.

A $2 billion decline in receipts from the Federal Reserveresulting
from its shift to a lower-yielding portfolio offset some of those
gains.

Outlays were $29 billion higher this March than they were in the
same month last year, mostly because about $31 billion in payments that
would ordinarily be made in April were instead made in March this year
(as April 1 was a Sunday). In addition, revisions to the estimated cost
of several credit programs — mostly the Troubled Asset Relief Program
— added $7 billion to spending this March compared with outlays last
March. Absent those effects, outlays would have been $9 billion less in
March 2012 than in March 2011.

Compared with payments in March a year ago, outlays for Medicaid
and unemployment benefits decreased by $4 billion and $3 billion,
respectively, and spending for defense declined by $4 billion (after
shifts in the dates of certain payments are taken into account). In
addition, outlays for the Making Work Pay credit (which expired last
year) fell by $3 billion. In contrast, spending for Social Security
benefits increased by $4 billion.

CBO estimates that the Treasury will record a deficit of $777
billion for the first six months of fiscal year 2012. Compared with the
budget figures at the same point last year, revenues this year were $46
billion higher and outlays were $7 billion lower.

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

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