Federal Deficit Still Above 1.3 Trillion

September 9, 2010 Taxation in USA

US CapitolThroughout the first 11 months of 2010 fiscal year the US federal government amassed a USD 1.3 trillion budget deficit, showing only a slight improvement over the previous year.

On September 7th the US Congressional Budget Office (CBO) released its latest Monthly Budget Review detailing several small improvements in the federal government’s financial standing over the first 11 months of the 2010 fiscal year. The publication showed that the federal government has incurred a deficit of nearly USD 1.3 trillion, an approximate USD 100 billion decrease over the same period in the 2009 fiscal year. In the same 11 months time period federal outlays dropped by 2 percent, when compared to the previous year.

Federal government revenues over the examined time period totaled USD 1.92 trillion, a 1.5 percent increase when compared to USD 1.89 trillion over the same months in the 2009 year. According to the report, corporate income tax collections reached approximately USD 142 billion over the 11 months, a 29.5 percent improvement over the previous year. However, personal income taxes underwent a 2.8 percent decrease in collections over the same timeframe, falling to a total of USD 790 billion. Revenues from social insurance contributions also fell by 3 percent, to approximately USD 797 billion.

According to the report, throughout 2010 federal outlays reached USD 3.18 trillion, approximately 2.4 percent below the same period in 2009. Social security benefit expenditures were the largest outlay, at USD 637 billion. Military spending was the next most significant expense, at USD 606 billion. The Government’s financial-crisis measure, the Troubled Asset Relief Program (TARP), which required a USD 166 billion outlay in 2009, actually turned into a USD 108 billion surplus in 2010.

Based on the currently available revenue and outlay data, the CBO estimates that the federal deficit for the entire 2010 fiscal year will reach approximately 9.1 percent of the national GDP, compared to 9.9 percent for the 2009 year.

Photo by joewhitsitt