Monthly Budget Review

Report
December 7, 2012

The federal budget deficit was $292 billion for the first two months of fiscal year 2013, $57 billion more than the shortfall recorded in October and November of last year, CBO estimates. Without shifts in the timing of certain payments in each year, however, the deficit for the two-month period would have been about $8 billion lower this year than in fiscal year 2012.

Total Receipts Were Up by 10 Percent in the First Two Months of Fiscal Year 2013

Receipts for the first two months of in fiscal year 2013 totaled $346 billion, $30 billion more than those in the same period last year. Compared with receipts in October and November last year:

  • Net receipts from individual income and payroll (social insurance) taxes rose by $23 billion, or 8 percent. Increases in amounts withheld from workers’ paychecks ($21 billion, or 8 percent) accounted for most of the year-over-year gain, partly because wages and salaries were higher and partly because October 2012 had two more days on which tax payments were received than October 2011 did. Nonwithheld receipts, mainly from filings of 2011 tax returns by people who had received filing extensions, increased by $2 billion.
  • Receipts from corporate income taxes, which are quite small at this point in the year, have been slightly less.
  • Other revenues rose by $7 billion (or 22 percent). Receipts from the Federal Reserve accounted for about $4 billion of that increase, primarily because of higher yields on the securities it holds. In addition, excise tax receipts rose by $2 billion in the first two months of the fiscal year, compared with the same period a year ago.

Spending Was About 4 Percent Higher When Adjusted for Timing Shifts

If shifts in the timing of certain payments were excluded, spending in the first two months of fiscal year 2013 would have been about $22 billion (or 4 percent) more than outlays in the same period last year. (The year-over-year changes discussed below reflect adjustments for those calendar-related shifts.)

For some major programs and activities, spending increased:

  • Social Security, Medicare, and Medicaid—Expenditures for each of the three largest entitlement programs were higher, with outlays for Social Security benefits increasing the most—by $8 billion (or 7 percent). Spending for Medicare rose by $6 billion (or 8 percent) and outlays for Medicaid rose by $4 billion (or 9 percent).
  • Other Activities—Expenditures in this broad category increased by $7 billion (or 4 percent). Spending increased for the Departments of Agriculture and Justice and for several other programs.
  • Net interest—Outlays for net interest on the public debt were $2 billion (or 5 percent) higher, reflecting both the growing debt held by the public and higher payments for inflation-indexed securities.

In contrast, outlays decreased for some major categories of spending:

  • Unemployment benefits—Spending declined by $4 billion (or 22 percent), mostly because fewer people have been receiving benefits in recent months.
  • Defense—Outlays were $2 billion (or 2 percent) less than in the same period last year.