Deficit Tracker

Tracking the Federal Deficit: November 2023

• $317 billion deficit, increasing year-over-year (YOY) by $68 billion.
  • $275 billion in revenues, increased YOY by $23 billion (9%).
  • $592 billion in outlays, increased YOY by $91 billion (18%).

Fiscal Year Comparisons with FY2023

• The government ran a cumulative deficit of $383 billion in FY2024 ($56 billion more than the prior fiscal year when adjusted for timing shifts*).
• Revenues were $678 billion, an increase of 19%, largely due to:
  • $70 billion (14%) increase in individual income and payroll tax revenue. Of this amount, non-withheld payments of income and payroll taxes increased by $42 billion (65%), largely reflecting delayed 2023 tax filings attributable to tax relief provided by the IRS to those affected by disaster situations. Withholdings from workers’ paychecks increased by $33 billion (7%), reflecting rising wages and salaries.
  • $38 billion (216%) increase in corporate income taxes, largely attributable to tax relief provided by the IRS to businesses in areas affected by natural disasters.
  • $4 billion (12%) increase in individual income tax refunds, which reduce net receipts.
• Outlays were $1.1 trillion, an increase of 17%, largely due to:*
  • $63 billion increase in spending by the Federal Deposit Insurance Corporation (FDIC) due to facilitating the aftermath of bank failures throughout spring 2023, which it expects to recover by liquidating the banks’ assets and collecting higher premiums from other FDIC-insured institutions over several years.
  • $60 billion (65%) increase in net interest payments on the public debt from rising interest rates and a growing debt burden.
  • $18 billion (13%) increase in spending by the Department of Defense (DoD), mainly for military personnel, operations, maintenance, and larger payments to the military retirement fund following DoD’s Board of Actuaries assessment last year.
    • The Board’s decision to increase the net amount of accrual payments in October 2023 reflects a rising share of military retirees receiving veteran’s compensation at higher disability ratings who therefore are eligible to receive military retirement and veterans’ compensation concurrently. This is fully offset by a corresponding increase in Treasury’s receipts of agencies’ contributions for military retirement, the latter of which is recorded as a decrease in federal outlays and therefore budget neutral.
  • $8 billion (18%) increase in spending by the Department of Veterans Affairs due to higher per capita costs and increased use of health care facilities.
  • $5 billion increase in Department of Energy spending, primarily due to the Biden administration’s sale of a significant share of oil from the Strategic Petroleum Reserve in FY2023 (no such sale has occurred thus far in FY2024).
  • $3 billion (37%) decrease in international assistance, as support for nations such as Ukraine was appropriated in FY2023, but has not yet been in FY2024.
  • Waning funding for pandemic recovery programs and related expansions, such as:
    • $8 billion (24%) decrease in Food and Nutrition Service’s Supplemental Nutrition Assistance Program (SNAP).
    • $6 billion (66%) decrease in Public Health and Social Services Emergency Fund.

Analysis:

The Federal Reserve is expected to leave its benchmark federal funds rate unchanged in December. This news coincides with recent trends of decreased consumer spending and easing inflation heading into the holiday season.

Meanwhile, the government continues to be funded under a continuing resolution as Congress faces two deadlines, January 19 and February 2, to pass FY2024 appropriations. Congress will also consider in the coming weeks emergency supplemental funding for security and humanitarian assistance to Ukraine, Israel, Gaza, and Indo-Pacific allies, U.S. border security, and other domestic spending including natural disasters and child care.

Tracking the Federal Deficit: October 2023

• $65 billion deficit,  decreasing  year over year (YOY) by $23 billion (26%).
• Given that October 1 fell on a weekend this year, certain payments that otherwise would have been made this month were instead made in September (and therefore into FY2023). If not for this shift, October’s deficit would have been $137 billion.*

Fiscal Year 2023 in Review

The federal government ran a deficit of $1.7 trillion in fiscal year 2023, $320 billion (23%) more than FY2022’s deficit. Revenues decreased by $457 billion (9%) and outlays decreased by $83 billion (1%) year-over-year.* Outlays were impacted by the Federal Reserve’s six interest rate hikes since October 2022, which pushed the federal funds rate to a 22-year high of 5.25% to 5.50%, raising debt servicing costs by $177 billion (33%). Changes in student loan policy over the past year also impacted these figures: In September 2022, the Department of Education recorded outlays of $379 billion, largely the result of the Biden administration’s cancellation of a portion of outstanding student debt, which the Supreme Court later deemed unconstitutional in June 2023. The scoring of this on-again, off-again policy distorted year-over-year deficit comparisons. In the policy’s absence, the FY2023 deficit would have been $2 trillion—more than double the $0.9 trillion deficit in FY2022 sans student loan cancellation.

Receipts:

Receipts totaled $4.4 trillion in FY2023, a 9% decrease year-over-year, following FY2022’s unusually high collections due to the economic rebound following the pandemic. Individual income taxes decreased by $456 billion (17%), largely due to fewer capital gains realizations and delayed 2023 tax filings attributable to tax relief provided by the IRS for those affected by disaster situations, particularly in California. This fiscal year saw a $106 billion (99%) decrease in remittances from the Federal Reserve, as higher interest rates raised the Fed’s interest expenses above its income and eliminated profits across most of its banks. Individual income tax refunds also increased by $127 billion (52%) in FY2023, reducing net receipts.

Outlays:

Outlays in FY2023 totaled $6.1 trillion, a 1% decrease from FY2022.* In addition to unique timing shifts in some payments in FY2022 and FY2023, FY2023 outlays were significantly affected by several one-time spending changes throughout the year that included, in addition to those cited above:

• The lack of spectrum auction receipts, compared to $104 billion in FY2022.
• A $101 billion increase in spending by the Federal Deposit Insurance Corporation (FDIC) due to bank failures throughout spring 2023, which it expects to recover by liquidating the banks’ assets and collecting higher premiums from other FDIC-insured institutions over several years.
• A $38 billion increase in spending by the Pension Benefit Guaranty Corporation (PBGC), reflecting payments to certain multi-employer pension plans resulting from the bailout included in the 2021 American Rescue Plan.

End of year data for the Fiscal Year 2023 in Review is from the U.S. Treasury Department.

Tracking the Federal Deficit: September 2023

• $166 billion deficit, decreasing year-over-year (YOY) by $264 billion.
  • $469 billion in revenues, decreased YOY by $19 billion (4%).
  • $635 billion in outlays, decreased YOY by $283 billion (31%).
  • Recorded deficits in September 2022 and 2023 were impacted by unique timing shifts in outlays, if not for which the September 2023 deficit would have been $93 billion, a YOY decrease of $273 billion.*
  • This year’s decrease in outlays is largely attributable to costs associated with the Department of Education’s planned student-loan cancellation program that were recorded in September 2022. When excluded, total federal outlays in September 2023 would have increased by $87 billion (18%).*

Fiscal Year Comparisons with FY2022

• The government ran a cumulative deficit of $1.7 trillion in FY2023 ($368 billion more than the prior fiscal year when adjusted for timing shifts*).
• Revenues were $4.4 trillion, a decrease of 9%, largely due to:
  • $326 billion (8%) decrease in individual income and payroll tax revenue. Of this amount, non-withheld payments of income and payroll taxes declined by $296 billion (24%), largely reflecting decreases in 2022 and 2023 tax liabilities, delayed 2023 tax filings attributable to tax relief provided by the IRS for those affected by disaster situations, and smaller collections of capital gains taxes. Withholdings from workers’ paychecks increased by $115 billion (4%), reflecting rising wages and salaries.
  • $129 billion (52%) increase in individual income tax refunds.
  • $106 billion (99%) decrease in remittances from the Federal Reserve, as higher interest rates continued to raise the Fed’s interest expenses above its income and eliminate profits across most of its banks.
  • $20 billion (20%) decrease in customs duties due to a reduction in imports.
  • $17 billion (25%) decrease in unemployment insurance receipts, as states levied higher taxes on employers during FY2022 to replenish UI trust funds that were depleted due to high unemployment during the pandemic. (These collections count towards federal revenue, as UI is a federal program administered by states.)
• Outlays were $6.1 trillion, a decrease of 1%, largely due to:*
  • $680 billion (106%) decrease in Department of Education programs, largely due to the Supreme Court’s decision to block the Biden administration’s student debt cancellation plan.
  • $285 billion (11%) increase in the largest mandatory spending programs, such as Social Security, Medicare, and Medicaid, reflecting increases in both the cost of benefits and number of beneficiaries.
  • $177 billion (33%) increase in net interest payments on the public debt from rising interest rates and a growing debt burden.
  • $52 billion (7%) increase in spending by the Department of Defense, mainly for operations, maintenance, research, and development.
  • Impacts unique to FY2023, including: the lack of spectrum auction receipts this fiscal year (counted as “offsetting receipts”); a one-time $38 billion increase in spending by the Pension Benefit Guaranty Corporation; and a $101 billion increase in spending by the Federal Deposit Insurance Corporation (FDIC) due to bank failures throughout spring 2023, which it expects to recover by liquidating the banks’ assets and collecting higher premiums from other FDIC-insured institutions over several years.
  • Funding for several pandemic recovery programs continued recent trends, such as the $120 billion (41%) decrease in certain refundable tax credits (largely due to the expirations of the expanded Child Tax Credit), the $65 billion (70%) decrease in pandemic-related public health expenditures from the Public Health and Social Services Emergency Fund, and the approximately $22 billion (73%) increase in Coronavirus Refundable Credits (such as for employee retention, and paid sick and family leave) due to delayed uptake by employers.

Analysis:

The Federal Reserve left interest rates unchanged in September but signaled that they might need to make another rate increase in 2023. Over on Capitol Hill, lawmakers united with mere hours to avert a government shutdown by passing a continuing resolution and funding the government at current levels through November 17. A government shutdown would harm the U.S. economy, as it is estimated that the 2018-2019 shutdown resulted in $3 billion in permanent lost economic growth. Moody’s, the last of three major credit rating agencies to assign the United States an outstanding rating of AAA, also signaled that a government shutdown may lead to a credit rating downgrade.

Looking ahead, October 1 marks the restart of student loan repayments after a more than 3-year pause during the COVID-19 pandemic. October 16 is the deadline for tax filings delayed by natural disasters earlier this year, affecting most counties in California and several in Alabama and Georgia. Congress will also consider emergency supplemental funding for security assistance to Ukraine and Israel, and will need to elect a new speaker of the House.

Tracking the Federal Deficit: August 2023

• $90 billion surplus (compared to August 2022’s deficit of $220 billion).
  • $284 billion in revenues, decreased year-over-year (YOY) by $20 billion (7%).
  • $193 billion in outlays, decreased YOY by $330 billion (63%).
  • The Supreme Court’s decision to strike down the Biden administration’s student loan forgiveness plan led to a large, one-time decrease in Department of Education spending. Without that reduction, spending would have been about the same in August 2023 as in August 2022.

Fiscal Year-to-Date Comparisons with FY2022

• The government ran a cumulative deficit of $1.5 trillion through August ($1.6 trillion when adjusted for timing shifts, $641 billion more than during the same period last year*).
• Revenues were $4 trillion, a decrease of 10%, largely due to:
  • $320 billion (9%) decrease in individual income and payroll tax revenue. Of this amount, non-withheld payments of income and payroll taxes declined by $279 billion (26%), largely reflecting decreases in 2022 tax liabilities, delayed 2023 tax filings attributable to tax relief provided by the IRS for those affected by disaster situations, and smaller collections of capital gains taxes.
  • $128 billion (54%) increase in individual income tax refunds.
  • $105 billion (99%) decrease in remittances from the Federal Reserve, as higher interest rates continued to raise the Fed’s interest expenses above its income and eliminate profits across most of its banks.
  • $17 billion (26%) decrease in unemployment insurance receipts, as states levied higher taxes on employers during FY2022 to replenish UI trust funds that were depleted due to high unemployment during the pandemic. (These collections count towards federal revenue, as UI is a federal program administered by states.)
  • $17 billion (19%) decrease in customs duties due to a reduction in imports.
• Outlays were $5.6 trillion, an increase of 4%, largely due to:*
  • $265 billion (12%) increase in the largest mandatory spending programs, such as Social Security, Medicare, and Medicaid, reflecting increases in both the cost of benefits and number of beneficiaries.
  • $259 billion (133%) decrease in Department of Education programs, largely due to a reduction in student loan forgiveness spending associated with the June 2023 Supreme Court decision to block the Biden administration’s student loan repayment policies.
  • $149 billion (30%) increase in net interest payments on the public debt from rising interest rates and a growing debt burden.
  • $52 billion increase in spending by the Federal Deposit Insurance Corporation (FDIC) due to bank failures throughout spring 2023, which it expects to recover by liquidating the banks’ assets and collecting higher premiums from other FDIC-insured institutions over several years.
  • Funding for several pandemic recovery programs continued recent trends, such as the $120 billion (43%) decrease in certain refundable tax credits (largely due to the expiration of the expanded Child Tax Credit), the $65 billion (71%) decrease in pandemic-related public health expenditures from the Public Health and Social Services Emergency Fund, and the approximately $25 billion (nearly 100%) increase in Coronavirus Refundable Credits (such as for employee retention, and paid sick and family leave) due to delayed uptake by employers.

Analysis:

Fitch Ratings downgraded U.S. debt from AAA to AA+ on August 1, citing rising deficits, a broken budgeting process, and political brinksmanship—echoing Standard & Poor’s downgrade after the 2011 debt limit episode.

Looking ahead, September marks both the end of the fiscal year and the resumption of interest accrual on federal student loans. Even absent the Biden administration’s student loan forgiveness plan, the deficit is expected to increase from $1 trillion in FY2022 to $2 trillion this fiscal year. In the coming weeks, lawmakers will be pressed to finalize a 2024 budget deal and avoid a government shutdown on October 1.

Tracking the Federal Deficit: July 2023

• $222 billion deficit, increasing year-over-year (YOY) by $11 billion.
  • $276 billion in revenues, increased YOY by $7 billion (3%).
  • $499 billion in outlays, increased YOY by $18 billion (4%).
  • The July 2023 deficit was impacted by unique timing shifts in outlays, if not for which it would have been $309 billion instead of $222 billion, resulting in a YOY increase of $98 billion.*

Fiscal Year-to-Date Comparisons with FY2022

• The government ran a cumulative deficit of $1.6 trillion through July ($1.7 trillion when adjusted for timing shifts, $954 billion more than during the same period last year*).
• Revenues were $3.7 trillion, a decrease of 10%, largely due to:
  • $313 billion (9%) decrease in individual income and payroll tax revenue. Of this amount, non-withheld payments of income and payroll taxes declined by $284 billion (26%), largely reflecting decreases in 2022 tax liabilities and delayed 2023 tax filings attributable to tax relief provided by the IRS for those affected by disaster situations. (Net receipts collected through July were approximately $300 billion less than prior CBO projections mainly because of weakened individual and corporate income tax revenue.)
  • $130 billion (59%) increase in individual income tax refunds.
  • $98 billion (99%) decrease in remittances from the Federal Reserve, as higher interest rates continued to raise the Fed’s interest expenses above its income and eliminate profits across most of its banks.
  • $16 billion (19%) decrease in customs duties due to a reduction in imports.
  • $12 billion (21%) decrease in unemployment insurance receipts, as states levied higher taxes on employers during FY2022 to replenish UI trust funds that were depleted from high unemployment during the pandemic. (These collections count towards federal revenue, as UI is a federal program administered by states.)
• Outlays were $5.4 trillion, an increase of 11%, largely due to:*
  • $244 billion (12%) increase in the largest mandatory spending programs, such as Social Security, Medicare, and Medicaid, reflecting increases in both the cost of benefits and number of beneficiaries.
  • $146 billion (34%) increase in net interest payments on the public debt from rising interest rates and a growing debt burden.
  • $91 billion (57%) increase in Department of Education programs, largely due to newly recorded costs ($71 billion) in July associated with the Biden administration’s income-driven student loan repayment plan and modifications to student loan repayment policies.
  • $52 billion increase in spending by the Federal Deposit Insurance Corporation (FDIC) due to bank failures throughout spring 2023, which it expects to recover by liquidating the banks’ assets and collecting higher premiums from other FDIC-insured institutions over several years.
  • Funding for several pandemic recovery programs continued recent trends, such as the $120 billion (44%) decrease in certain refundable tax credits (largely due to the expiration of the expanded Child Tax Credit), the $59 billion (71%) decrease in pandemic-related public health expenditures from the Public Health and Social Services Emergency Fund, and the $25+ billion (>100%) increase in Coronavirus Refundable Credits (such as for paid sick and family leave) due to delayed uptake by employers.

Analysis:

In July, the Federal Reserve raised its benchmark federal funds rate by a quarter percentage point to a range of 5.25% and 5.5%—the highest level in 22 years—to combat ongoing inflationary pressures. While financial markets had largely anticipated and priced in the increase, it will impact the deficit in the form of heightened debt servicing costs. The July headline Consumer Price Index saw a modest uptick to 3.2% yet also came with additional evidence that inflation is cooling, thus potentially decreasing the need for the Federal Reserve to further increase interest rates. Working in the opposite direction, July 31 was the deadline for taxpayers in Arkansas, Indiana, Mississippi, and Tennessee to complete their filing for the 2023 tax season, which helped boost federal revenues this July compared to July 2022. Taxpayers in these states and others were granted relief earlier this year due to natural disasters that impacted their ability to file by the April 18, 2023 tax day deadline.

Tracking the Federal Deficit: June 2023

• $225 billion deficit, increasing year-over-year (YOY) by $136 billion.
  • $421 billion in revenues, decreased YOY by $40 billion (9%).
  • $646 billion in outlays, increased YOY by $97 billion (18%).
  • The June 2023 deficit was impacted by unique timing shifts in outlays, if not for which it would have been $139 billion instead of $225 billion, resulting in a YOY increase of $50 billion.*

Fiscal Year-to-Date Comparisons with FY2022

• The government ran a cumulative deficit of $1.39 trillion through June ($1.37 trillion when adjusted for timing shifts, $852 billion more than during the same period last year*).
• Revenues were $3.4 trillion, a decrease of 11%, largely due to:
  • $321 billion (10%) decrease in individual income and payroll tax revenue. Of this amount, non-withheld payments of income and payroll taxes declined by $283 billion (27%), largely reflecting decreases in 2022 tax liabilities and delayed tax filings attributable to tax relief provided by the IRS for those affected by disaster situations.
  • $106 billion (50%) increase in individual income tax refunds.
  • $92 billion (99%) decrease in remittances from the Federal Reserve, as higher interest rates continued to raise the Fed’s interest expenses above its income and eliminated profits across most of its banks.
  • $14 billion (19%) decrease in customs duties due to a reduction in imports.
  • $13 billion (24%) decrease in unemployment insurance receipts, as states levied higher taxes on employers during FY2022 to replenish UI trust funds that were depleted from high unemployment during the pandemic. (These collections count towards federal revenue, as UI is a federal program administered by states.)
• Outlays were $4.8 trillion, an increase of 10%, largely due to:*
  • $223 billion (12%) increase in the largest mandatory spending programs, such as Social Security, Medicare, and Medicaid, reflecting increases in both the cost of benefits and number of beneficiaries.
  • $135 billion (37%) increase in net interest payments on the public debt from rising interest rates and a growing debt burden.
  • $52 billion increase in spending by the Federal Deposit Insurance Corporation (FDIC) due to bank failures throughout spring 2023, which it expects to recover by liquidating the banks’ assets and collecting higher premiums from other FDIC-insured institutions over several years.
  • $22 billion (15%) increase in Department of Education programs, largely due to costs associated with the modified requirements for student loan repayments.
  • $19 billion increase in mortgage loan programs administered by the Department of Housing and Urban Development, reflecting last year’s downward re-estimate to the subsidy costs of housing loans previously made by the Federal Housing Administration.
  • Funding for several pandemic recovery programs continued recent trends, such as the $120 billion (46%) decrease in certain refundable tax credits (largely due to the expiration of the expanded Child Tax Credit), the $56 billion (71%) decrease in pandemic-related public health expenditures from the Public Health and Social Services Emergency Fund, and the $25+ billion (>100%) increase in Coronavirus Refundable Credits (such as for paid sick and family leave) due to delayed uptake by employers.

Analysis:

June ended with the Supreme Court striking down President Biden’s student loan forgiveness program, which, once recorded, will reduce outlays (and the deficit) by more than $300 billion in FY2023. President Biden has since announced plans to address student debt using the Secretary of Education’s authority under the Higher Education Act. Additionally, the Federal Reserve may continue its interest rate increases in late July, which would have implications for the deficit in the form of heightened debt servicing costs. Working in the opposite direction over the next few months, revenues are likely to receive a boost as taxpayers in select states who were granted relief due to natural disasters earlier this year complete filing for the 2023 tax season.

In June, CBO released its 2023 Long-Term Budget Outlook, underscoring the need for policymakers to get serious about addressing our nation’s fiscal health. CBO estimates that federal debt held by the public will increase from 98% of GDP in 2023 to 181% in 2053. By that time, net interest costs are projected to surge to almost four times the current 30-year average—surpassing all non-Social Security and non-health mandatory spending by 2027, all discretionary spending by 2047, and Social Security spending by 2051.

Tracking the Federal Deficit: May 2023

• $236 billion deficit, increasing year-over-year (YOY) by $170 billion.
  • $308 billion in revenues, decreased YOY by $81 billion (21%).
  • $544 billion in outlays, increased YOY by $89 billion (20%).
  • The May 2022 deficit was impacted by unique timing shifts in outlays, if not for which it would have been $131 billion instead of $66 billion, resulting in a YOY increase of $105 billion.*

Fiscal Year-to-Date Comparisons with FY2022:

• The government ran a cumulative deficit of $1.16 trillion through May ($1.22 trillion when adjusted for timing shifts, $798 billion more than during the same period last year.*)
• Revenues were $3.0 trillion, a decrease of 11%, largely due to:
  • $5 billion (2%) net increase in corporate income tax receipts, while individual income and payroll tax revenue declined by $299 billion (10%). Of this amount, non-withheld payments of income and payroll taxes declined by $261 billion (28%), largely reflecting a decrease in 2022 tax liabilities.
  • $99 billion (49%) increase in individual income tax refunds.
  • $82 billion (99%) decrease in remittances from the Federal Reserve, as continued higher interest rates raised the Fed’s interest expenses above its income and eliminated profits across most of its banks.
  • $13 billion (24%) decrease in unemployment insurance (UI) receipts, as states levied higher taxes on employers during FY2022 to replenish UI trust funds that were depleted from high unemployment during the pandemic. (These collections count towards federal revenue, as UI is a federal program administered by states.)
  • $12 billion (18%) decrease in customs duties due to a reduction in imports.
• Outlays were $4.2 trillion, an increase of 11%, largely due to:*
  • $112 billion (34%) increase in net interest payments on the public debt from rising interest rates and a growing debt burden.
  • $53 billion increase in spending by the Federal Deposit Insurance Corporation (FDIC) due to several bank failures throughout spring 2023, which it expects to recover by liquidating the banks’ assets and collecting higher premiums from other FDIC-insured institutions over several years.
  • $48 billion (49%) increase in Department of Education programs, largely due to costs associated with the extension of the pause on student loan payments.
  • $38 billion (8%) increase in spending by the Department of Defense, mainly for operations, maintenance, research, and development.
  • $31 billion (8%) increase in Medicaid, reflecting enrollment increases stemming from COVID-era eligibility policies. With March’s expiration of the coronavirus public health emergency, states can reassess eligibility and disenroll those who no longer qualify, but CBO anticipates that will take several months .
  • Impacts reported in January, including the continued lack of spectrum auction receipts this fiscal year (counted as “offsetting receipts”), and a one-time increase in spending by the Pension Benefit Guaranty Corporation.
  • Funding for several pandemic recovery programs continued recent trends, such as the $120 billion (47%) decrease in certain refundable tax credits (largely due to the expiration of the expanded Child Tax Credit) and $53 billion (71%) decrease in pandemic-related public health expenditures from the Public Health and Social Services Emergency Fund.

Analysis:

Bipartisan negotiations over the debt limit consumed the month of May, culminating in passage of the Fiscal Responsibility Act (FRA), signed by President Biden on June 3, 2023. The legislation cuts discretionary spending in FY2024 relative to CBO projections and limits discretionary spending growth to 1% in FY2025, slower than the projected rate of inflation. It also includes an automatic 1% cut to discretionary spending caps (relative to FY2023 levels) if Congress fails to pass its annual spending bills before January 1, 2024, incentivizing lawmakers from both parties to reach a consensus on the appropriations process in a timely manner.

In the near term, the end of the COVID-19 public health emergency on May 11, along with the rescission of some remaining COVID-related funds by the FRA, will modestly decrease outlays in the coming months. Also, as tax filers affected by natural disasters and granted delays, particularly in California, begin filing their taxes in the coming months, revenues will be impacted. Lastly, any further rate increases from the Federal Reserve would have implications for the deficit as the government faces heightened debt servicing costs.

Tracking the Federal Deficit: April 2023

• $173 billion surplus, decreasing year-over-year (YOY) by $135 billion.
  • $638 billion in revenues, decreased  YOY by $225 billion (26%).
  • $465 billion in outlays, decreased  YOY by $90 billion (16%).
  • April deficits have recently been impacted by unique timing shifts in outlays, if not for which the surplus would have been $373 billion in April 2022 and $99 billion in April 2023.*

Fiscal Year-to-Date Comparisons with FY2022:

• The government ran a cumulative deficit of $928 billion ($991 billion including timing shifts, $696 billion more than during the same period last year.*)
• Revenues were $2.7 trillion, a decrease of 10%, largely due to:
  • $8 billion (4%) net increase in corporate income tax receipts, while individual income and payroll tax revenue declined by $235 billion (9%). Of this amount, non-withheld payments of income and payroll taxes declined by $190 billion (23%), largely reflecting a decrease in 2022 tax liabilities.
  • $80 billion (46%) increase in individual income tax refunds.
  • $70 billion (99%) decrease in remittances from the Federal Reserve, as continued higher interest rates raised the Fed’s interest expenses above its income and eliminated profits across most of its banks.
  • $10 billion (30%) decrease in unemployment insurance (UI) receipts, as states levied higher taxes on employers during FY2022 to replenish UI trust funds that were depleted from high unemployment during the pandemic. (These count towards federal revenue, as UI is a federal program administered by states.)
  • $10 billion (18%) decrease in customs duties due to a reduction in imports.
• Outlays were $3.7 trillion, an increase of 12% largely due to:*
  • $107 billion (40%) increase in net interest payments on the public debt, the single largest increase in net outlays due to rising interest rates.
  • $48 billion (56%) increase in Department of Education programs, largely due to costs associated with the extension of the pause on student loan payments.
  • $39 billion increase in spending by the Federal Deposit Insurance Corporation (FDIC) due to several bank failures throughout spring 2023, which it expects to recover by liquidating the banks’ assets and collecting higher premiums from other FDIC-insured institutions over the next several years.
  • $33 billion (8%) increase in spending by the Department of Defense, mainly for operations, maintenance, research, and development.
  • $25 billion (7%) increase in Medicaid reflecting enrollment increases stemming from COVID-era eligibility policies. With March’s expiration of the coronavirus public health emergency, April 2023 was the first month in which states could reassess eligibility and disenroll those who no longer qualify, but CBO anticipates it will take several months for states to complete that policy change.
  • Impacts reported in January, including the continued lack of spectrum auction receipts this fiscal year (counted as “offsetting receipts”), and a one-time increase in spending by the Pension Benefit Guaranty Corporation.
  • Funding for several pandemic recovery programs continued recent trends:
    • $115 billion (48%) decrease in certain refundable tax credits, largely due to the expiration of the expanded Child Tax Credit.
    • $50 billion (74%) decrease in pandemic-related public health expenditures from the Public Health and Social Services Emergency Fund.
    • Approximately $15 billion (nearly 100%) increase in Coronavirus Refundable Credits due to delayed uptake in employer credits, such as for paid sick and family leave.

Analysis:

April capped off a weak tax season, with revenues last month decreasing 26% year-over-year, partly caused by extended filing deadlines in designated disaster areas—including most of California, parts of Alabama and Georgia, and several counties in other states. Net receipts collected through April 2023 were approximately $250 billion less than CBO anticipated in its February 2023 baseline. Additionally, continued instability in the U.S. banking sector sparked questions over wider industry impacts and future economic implications. The Federal Reserve also raised interest rates—for the tenth time in a little over a year—by another quarter-percentage-point to combat ongoing inflationary pressures, bringing the benchmark federal funds rate to a range of 5.0% and 5.25%. This impacts the deficit as the government faces increased debt servicing costs.

BPC’s latest X Date projection takes these factors into account and currently estimates that the U.S. will likely find itself unable to make good on all of its obligations sometime between early June and early August. Looking ahead, May tax receipts and outlays will provide clarity on how just how dangerously low the U.S. Treasury’s cash balances will be in early June.

Tracking the Federal Deficit: March 2023

• $376 billion deficit, increasing  year-over-year (YOY) by $183 billion.
  • $314 billion in revenues, decreased  YOY by $2 billion (1%).
  • $690 billion in outlays, increased  YOY by $182 billion (36%).
    • March 2023 outlays were impacted by unique timing shifts, if not for which they would have been $108 billion (21%) more than in March 2022.*

Fiscal Year-to-Date Comparisons with FY2022:

• The government ran a cumulative deficit of $1.1 trillion
  • Outlays in the first half of FY2023 were impacted by unique timing shifts, if not for which the cumulative deficit would have been $420 billion (63%) more than during the same period last year.*
• Revenues were $2.0 trillion, a decrease of 3%, largely due to:
  • $68 billion (56%) increase in individual income tax refunds. The number of tax season refunds issued through March 2023 was 3% greater than the same period in 2022.
  • $60 billion (98%) decrease in remittances from the Federal Reserve, as higher interest rates raised the Fed’s interest expenses above its income and eliminated profits across most of its banks.
  • $13 billion (10%) increase in corporate income tax collections, while individual income and payroll tax revenue declined by $33 billion (2%).
  • $11 billion (39%) decrease in unemployment insurance (UI) receipts, as states levied higher taxes on employers during FY2022 to replenish unemployment insurance trust funds that were depleted from high unemployment during the pandemic. (These count towards federal revenue, as UI is a federal program administered by states.)
  • $7 billion (50%) increase in estate and gift tax receipts. These are levied on relatively few estates, so the receipts can increase substantially upon the passing of just a few wealthy individuals.
• Outlays were $3.1 trillion, an increase of 12%, largely due to:*
  • $132 billion (11%) increase in the largest mandatory spending programs, such as Social Security, Medicare, and Medicaid, reflecting increases in both the cost of benefits and number of beneficiaries.
  • $90 billion (41%) increase in net interest payments on the public debt from rising interest rates.
  • $53 billion (75%) increase in Department of Education programs, largely due to costs associated with the extension of the pause on student loan payments.
  • $29 billion in Federal Deposit Insurance Corporation (FDIC) spending to cover deposits for the Silicon Valley Bank and Signature Bank failures, a cost that the FDIC anticipates will be recovered by liquidating the banks’ assets and collecting higher premiums from other FDIC-insured institutions over the next several years.
  • $8 billion (65%) increase in international assistance programs, primarily because of emergency aid to Ukraine.
  • Impacts reported in January, such as the continued lack of spectrum auction receipts this fiscal year (counted as “offsetting receipts”) and a one-time increase in spending by the Pension Benefit Guaranty Corporation.
  • Funding for several pandemic recovery programs continued recent trends:
    • $86 billion (43%) decrease in certain refundable tax credits, largely due to the expiration of the expanded Child Tax Credit.
    • $42 billion (72%) decrease in pandemic-related public health expenditures from the Public Health and Social Services Emergency Fund.
    • $26 billion (>100%) increase in Coronavirus Refundable Credits due to delayed uptake in employer credits, such as for paid sick and family leave.
    • $17 billion (94%) decrease in Small Business Administration spending.

Analysis:
BPC continues to closely monitor unanticipated instability in the U.S. banking sector, particularly as it sparked questions over wider industry impacts, future fiscal responses, and the ongoing debt limit debate. The Federal Reserve also implemented another quarter-percentage-point interest rate increase to combat ongoing inflationary pressures, bringing the benchmark federal-funds rate to a range between 4.75% and 5.0%—the highest level since September 2007.

Looking ahead, April will provide clarity into the strength of this year’s tax season and its impact on the year’s fiscal outlook. It also marks the last full month of the federal Public Health Emergency for the COVID-19 pandemic, which will affect outlays as emergency spending draws to a close.

Tracking the Federal Deficit: February 2023

• $263 billion deficit, increasing year-over-year (YOY) by $47 billion.
  • $262 billion in revenues, decreased  YOY by $28 billion (-10%).
  • $525 billion in outlays, increased  YOY by $19 billion (4%).*

Fiscal Year-to-Date Comparisons with FY2022:

• The government ran a cumulative deficit of $724 billion.
  • Outlays in the first five months of FY2023 were impacted by unique timing shifts, if not for which the cumulative deficit would have been $787 billion, $311 billion (65%) more than during the same period last year.*
• Revenues were $1.7 trillion, a decrease of 4%, largely due to:
  • $68 billion increase (more than double last year’s amount) in individual income tax refunds, which reduce net receipts. The number of refunds issued in February 2023 was 18% greater than in February 2022, but refunds, on average, are 11% smaller this year, in part due to the expiration of pandemic-related assistance.
  • $47 billion (98%) decrease in remittances from the Federal Reserve, as higher interest rates raised the Fed’s interest expenses above its income and eliminated profits across most of its banks.
  • $11 billion (10%) increase in corporate income tax collections, while individual income and payroll taxes declined by $46 billion (3%).
  • $9 billion (80%) increase in estate and gift tax receipts, the majority of which is likely attributable to estate taxes. These are levied on relatively few estates, so the receipts can increase substantially upon the passing of just a few wealthy individuals.
• Outlays were $2.6 trillion, an increase of 10%, largely due to:*
  • Impacts reported in January’s update, such as the continued lack of spectrum auction receipts this fiscal year (counted as “offsetting receipts”) and the one-time increase in spending by the Pension Benefit Guaranty Corporation.
  • $67 billion (38%) increase in net interest payments on the public debt from rising interest rates.
  • $62 billion (10%) increase in the largest mandatory spending programs, such as Social Security, Medicare, and Medicaid, reflecting increases in the cost of benefits and number of beneficiaries.
  • $12 billion (12%) increase in Department of Veteran Affairs programs, primarily due to increased use of health care services and per capita increases in veterans’ benefits.
  • $4 billion (37%) increase in international assistance programs, primarily because of emergency aid to Ukraine.
  • Funding for several pandemic recovery programs continued recent trends:
    • $69 billion (45%) decrease in certain refundable tax credits, largely because the expanded Child Tax Credit has expired.
    • $34 billion (66%) decrease in pandemic-related public health expenditures.
    • More than $10 billion (nearly 200%) increase in Coronavirus Refundable Credits due to delayed uptake in employer credits, such as for paid sick and family leave.
    • $15 billion (94%) decrease in Small Business Administration spending.

Analysis:
Recent testimony from Federal Reserve Chair Jerome Powell that the Fed is likely to raise interest rates higher than expected will impact the deficit as the government will face increased debt servicing costs. Waning pandemic assistance will also continue to affect federal outlays, as emergency allotments to Supplemental Nutrition Assistance Program (SNAP) benefits ended after February’s issuance, and Medicaid’s continuous enrollment provision will end this month. Additionally, the Biden administration’s decision in February to end the federal Public Health Emergency for COVID-19 on May 11, 2023, will affect outlays over the coming months. Meanwhile, as tax season progresses, BPC will closely monitor collections as they will directly impact the X Date, which we currently project to land sometime this summer or early fall.

Tracking the Federal Deficit: January 2023

• $38 billion deficit, increasing year-over-year (YOY) by $157 billion (compared to January 2022’s surplus of $119 billion).
  • $448 billion in revenues, decreased  YOY by $17 billion (4%).
  • $486 billion in outlays, increased  YOY by $139 billion (38%).
  • The New Year holiday shifted $26 billion of scheduled January 2023 payments into December 2022. Without that shift, which also affected payments in the last fiscal year, the deficit in December 2022 would have been $64 billion.*

Fiscal Year-to-Date Comparisons with FY2022:

• The government ran a cumulative deficit of $459 billion.
  • Outlays in the first four months of FY2023 were impacted by unique timing shifts, if not for which the cumulative deficit would have been $522 billion, double its level during the same period last year.*
• Revenues were $1.5 trillion, a decrease of 3%, largely due to:
  • $36 billion (approximately 97%) decrease in remittances from the Federal Reserve, as higher interest rates raised the Fed’s interest expenses above its income and eliminated profits across the majority of its banks.
  • $24 billion (81%) increase in individual income tax refunds, which reduce net receipts.
  • $19 billion (2%) increase in the amount withheld from workers’ paychecks for individual income and payroll taxes, in part reflecting higher total wages, salaries, and bonuses.
  • Non-withheld payments of income and payroll taxes rose by $4 billion (2%), largely reflecting October 2022 payments from taxpayers with filing extensions for tax year 2021.
  • $1 billion (1%) decrease in corporate income tax collections.
• Outlays were $2.0 trillion, an increase of 12%, largely due to:*
  • No collection of receipts yet this fiscal year from the auction of wireless spectrum (which are recorded as offsetting receipts and thus reduce net outlays), compared with the $81 billion in receipts that were collected in January 2022.
  • $76 billion (9%) increase in the largest mandatory programs, such as Social Security, Medicare, and Medicaid, reflecting increases in the cost of benefits and number of beneficiaries.
    • Social Security is responsible for nearly half the increase, partially reflecting the 8.7% cost-of-living adjustment (COLA) for benefits that went into effect in January 2023.
  • $58 billion (41%) increase in net interest on public debt from rising interest rates.
  • $38 billion increase in spending by the Pension Benefit Guaranty Corporation (PBGC), reflecting one-time payments to certain multi-employer pension plans resulting from the bailout included in the 2021 American Rescue Plan.
  • Funding for several pandemic recovery programs continued recent trends:
    • $49 billion (60%) decrease in certain refundable tax credits.
    • $29 billion (68%) decrease in pandemic-related public health expenditures.
    • $18 billion (nearly 300%) increase in Coronavirus Refundable Credits due to delayed uptake in employer and paid family leave credits.

Analysis:
While January’s elevated deficit was the result of several one-time factors, it has shed light on areas to monitor as FY2023 progresses. Income tax payments in January, for example, declined by $10 billion (7%) year-over-year, which included the first quarterly payments of estimated individual income taxes this fiscal year (largely reflecting 2022 tax liabilities). Whether this trend continues over the coming months will not only significantly impact the annual deficit but also carry more urgent ramifications. That’s because in January, the government ran up against its debt limit of $31.4 trillion and is currently exercising extraordinary measures to continue fully funding government operations. Once these measures exhaust and cash on hand is depleted, the U.S. government would reach the X Date and be unable to meet all its obligations in full and on time. Federal revenues greatly impact this timing, so we’ll be closely tracking them as tax season gets into full swing.

Tracking the Federal Deficit: December 2022

• $82 billion deficit, increasing year over year (YOY) by $61 billion.
  • $456 billion in revenues, decreased  YOY by $31 billion (6%).
  • $537 billion in outlays, increased  YOY by $29 billion (6%).
  • The New Year holiday shifted $26 billion of scheduled January 2023 payments into December 2022. Without that shift, the deficit in December 2022 would have been $56 billion.*

Fiscal Year-to-Date Comparisons with FY2022:

• The government ran a cumulative deficit of $418 billion
  • Outlays in the first quarter of FY2023 were impacted by unique timing shifts, if not for which the cumulative deficit for FY2023 would have been $455 billion, $102 billion (29%) higher than the same period last year.*
• Revenues were $1.0 trillion, a decrease of 2%, largely due to:
  • $25 billion (approximately 96%) decrease in remittances from the Federal Reserve, as higher interest rates raised the Fed’s interest expenses above its income.
  • $14 billion (47%) increase in individual income tax refunds, which reduce net receipts.
  • $8 billion (53%) decrease in unemployment insurance receipts, as states levied higher taxes on employers during FY2022 to replenish unemployment insurance trust funds that were depleted from high unemployment during the pandemic. (These count towards federal revenue, as UI is a federal program administered by states.)
• Outlays were $1.5 trillion, an increase of 5%, largely due to:*
  • $45 billion (44%) increase in net interest on public debt from rising interest rates.
  • $16 billion (40%) increase in spending by the Department of Education, primarily due to recorded costs associated with the Administration’s final rules modifying student loan repayment policies.
  • $12 billion (6%) increase in spending by the Department of Defense, mainly for military personnel, operations, and maintenance.
  • A doubling of spending on international security to $10 billion, as U.S. assistance to Ukraine intensified.
  • $12 billion (more than 200%) increase in Coronavirus Refundable Credits, available to employers to cover sick and family leave, employee retention, and insurance for certain workers.
  • Funding for several pandemic recovery programs continued to decline:
    • $47 billion (64%) decrease in certain refundable tax credits.
    • $20 billion (62%) decrease in public health expenditures associated with the pandemic.
    • $10 billion (94%) decrease in Small Business Administration loans and grants.
    • $6 billion (47%) decrease in unemployment compensation, as fewer individuals claimed benefits.

Analysis:
The FY2023 deficit will be impacted by last month’s passage of the bipartisan omnibus spending bill, which increased discretionary spending levels for the current fiscal year by approximately 10%. Looking ahead, the Federal Reserve is expected to further hike interest rates amid ongoing inflationary pressures, which will also widen the deficit. Finally, the fiscal priorities of the new 118th Congress are just coming into focus—specifically, we’ll be watching how the House of Representatives’ new rules to rein in spending may be put into practice.

Tracking the Federal Deficit: November 2022

• $248 billion deficit, increasing year over year (YOY) by $56 billion (29%)
  • $251 billion in revenues, decreased  YOY by $30 billion (11%)
  • $499 billion in outlays, increased  YOY by $27 billion (6%)*

Fiscal-Year-to-Date Comparisons with FY2022:

• The government ran a cumulative deficit of $335 billion
  • Given that October 1 fell on a weekend, certain payments that otherwise would have been made in FY2023 were shifted to FY2022. If not for this shift, the cumulative deficit for FY2023 would have been $399 billion, $42 billion higher than the same period last year.*
• Revenues were $570 billion, an increase of 1%, largely due to:
  • $20 billion (4%) increase in the amount withheld from workers’ paychecks for individual income and payroll taxes, in part reflecting higher total wages and salaries.
  • $14 billion (93%) decrease in remittances from the Federal Reserve, as higher interest rates raised the Fed’s interest expenses above its income.
  • $7 billion (52%) decrease in unemployment insurance receipts, as last year states levied higher taxes on employers to replenish unemployment insurance trust funds that were depleted from high unemployment during the pandemic. (These count towards revenue as the program is a federal program administered by the states.)
• Outlays were $906 billion, a decrease of 2%, largely due to:*
  • Waning funding for pandemic recovery programs, such as:
    • $33 billion (67%) decrease in certain refundable tax credits (including advanced Child Tax Credit payments)
    • $8 billion (41%) decrease in public health expenditures associated with the pandemic
    • $5 billion (56%) decrease in unemployment compensation, as fewer individuals claim benefits
    • $7 billion (96%) decrease in Small Business Administration loans and grants
  • $32 billion (53%) increase in net interest on public debt from rising interest rates in response to inflation
  • $36 billion (9%) increase in the largest mandatory programs, such as Social Security, Medicare, and Medicaid, reflecting in many instances increases in the number of beneficiaries
  • $10 billion (8%) increase in spending by the Department of Defense, mainly in research & development

Analysis:
In the near-term, deficits will be impacted by the Supreme Court’s ruling on the Biden administration’s cancellation of student debt, interest rate changes amid inflationary pressures, and by Congress’ decisions about discretionary spending levels during the lame duck session of the 117th Congress.

Tracking the Federal Deficit: October 2022

• $83 billion deficit, decreasing year over year (YOY) by $19 billion (19%)
• Given that October 1 fell on a weekend this year, certain payments that otherwise would have been made this month were instead made in September. If not for this shift, October’s deficit would have been $146 billion.*

Fiscal Year 2022 in Review

The federal government ran a deficit of $1.4 trillion in FY2022, approximately half the $2.8 trillion deficit incurred in FY2021. Contributing to this change are both increased revenues ($850 billion or 21% higher) and reduced outlays ($548 billion or 8% lower) than in FY2021. The expiration of pandemic-related relief spending, such expanded unemployment insurance, certain tax credits, and other public benefit programs, accounts for most of that change.

Outlays in FY2022 totaled $6.3 trillion, an 8% decrease from FY2021. If not for timing shifts that caused certain payments otherwise due in October 2022 (the first month of the new fiscal year) to be moved to September 2022, outlays would have decreased 9%.

Of significance this fiscal year was the $378 billion spending increase for the Department of Education, largely the result of the Biden Administration’s decision in August to cancel a portion of outstanding student debt. The Congressional Budget Office estimates that approximately 43 million borrowers with loans issued on or before June 30, 2022, will be eligible for up to $20,000 of forgiveness, provided they meet eligibility criteria. In fact, this policy change is the single largest contributing cost to the FY2022 deficit totaling $379 billion. Additional spending increases for the Department last year included the cost of extending the pause on loan repayments, continued collection of loans in default, interest accrual, and waivers that increased eligibility for forgiveness under income-driven repayment and public-sector loan plans. Not included, however, are estimated costs of the administration’s proposed rule to create a new income-driven repayment plan (also announced in August), which is still being assessed and will likely be finalized in FY2023.

There were also major spending changes in FY2022 for pandemic-relief programs and services, which saw decreases of:

• $486 billion (62%) for refundable tax credits (including Economic Impact Payments and advanced Child Tax Credit payments)
• $359 billion (90%) for unemployment compensation
• $300 billion (93%) for Small Business Administration programs
• $138 billion (56%) for federal COVID-19 relief dollars allocated to state and local governments
• $24 billion (71%) in grants to state and local governments for emergency rental assistance

Alternatively, other major spending categories in FY2022 increased by:

• $176 billion (8%) for Social Security, Medicaid, and Medicare, the country’s largest mandatory spending programs
• $26 billion (15%) for the Department of Agriculture, primarily for Supplemental Nutrition Assistance Program benefits and nationwide waivers that increased the number of free school meals during the 2021-2022 school year
• $121 billion (29%) in net interest on the public debt, primarily because higher inflation resulted in large adjustments to the principal of inflation-protected securities
• $16 billion (81%) for international assistance programs, due to funds authorized by the American Rescue Plan Act of 2021 and emergency support for Ukraine

Receipts totaled $4.9 trillion in FY2022— a 21% year-over-year increase—reflecting the general strength of the economy’s recovery from the height of the pandemic. Individual income and payroll tax revenues together rose $757 billion (23%), due to a combination of higher wages, increased employment, and payroll tax revenues that had been deferred by some employers from March 2020 to December 2021. Corporate tax revenues increased by $53 billion (14%) and unemployment insurance receipts increased by $11 billion (20%) as states continued to replenish their unemployment insurance trust funds.

While the near-term budget picture has improved as pandemic-related spending has tapered off, the country’s economic situation remains tenuous. As long as inflation and recession fears remain top of mind for Americans, policymakers will be pressed to respond, meaning that there’s a good chance the nation’s fiscal challenge will get worse before it gets any better.

Tracking the Federal Deficit: September 2022

The Congressional Budget Office estimates that the federal government ran a deficit of $431 billion in September, the final month of FY2022. This deficit was the difference between $488 billion in revenues and $919 billion in spending. Receipts were up by $28 billion (6%), and outlays were up by $394 billion (63%) compared to last September. Timing shifts did move some payments to September that otherwise would have been paid in October (i.e., FY2023), contributing to the higher-than-expected deficit last month.

More significantly, the Biden Administration’s announcement of a continued repayment pause on and forgiveness of federal student loan payments caused September’s deficit to be much higher than forecasted. Since federal accounting rules require these changes to be a one-time charge to the government, estimated costs of $426 billion were recorded by the federal government in September. In fact, student loan forgiveness was the single largest contribution to increased federal spending – and the deficit – in September (and in FY2022 overall), accounting for $379 billion. Given the sizeable impact of these one-time policy changes, it is difficult to discern year-over-year major trends for the month of September.

Tracking the Federal Deficit: August 2022

The Congressional Budget Office estimates that the federal government ran a deficit of $217 billion in August 2022, the eleventh month of FY2022. This deficit was the difference between $304 billion in revenues and $521 billion in spending. August receipts were up by $36 billion (13%), and outlays were up by $82 billion (4%) compared to a year ago. In 2021, August 1 fell on a weekend, shifting certain federal payments that would have otherwise been paid in August to July. If not for these timing shifts, the deficit in August 2022 would have been $13 billion less than August 2021’s deficit. The following discussion excludes the effects of these timing shifts. Additionally, student loan debt cancellation was announced in August, but given the uncertainty around implementation, those outlay adjustments are not reflected in this month’s deficit projections.

Analysis of notable trends: Over the first 11 months of FY2022, the federal government ran a deficit of $944 billion—barely more than one-third the size of the $2.7 trillion deficit over the same period in FY2021. So far this year, revenues were $822 billion (23%) higher than over the same period in FY2021, increasing across all major sources. Individual income and payroll tax receipts increased by $742 billion (25%). Unemployment insurance receipts also increased by $15 billion (29%) as states continued to replenish unemployment insurance trust funds following their depletion throughout the COVID-19 pandemic.

To date, outlays were $945 billion (15%) lower than the same 11-month period in FY2021, largely due to the continued decline of pandemic relief, including:

• Certain refundable tax credits by $469 billion (63%)
• Unemployment compensation by $346 billion (91%)
• Small Business Administration loans (primarily for the Paycheck Protection Program) by $296 billion (93%)
• General coronavirus relief to states and localities by $138 billion (57%).

Spending did, however, increase over the fiscal year to date for some Treasury Department programs that were expanded during the height of the pandemic. Spending on employer tax credits for sick and family leave, employee retention, and health insurance for certain workers, along with the temporarily refundable child and dependent care tax credit increased by $25 billion—a nearly fourfold spending increase over this time last year. Net interest on the public debt also continued to climb by $121 billion (32%) due to higher inflation.

Tracking the Federal Deficit: July 2022

The Congressional Budget Office estimates that the federal government ran a deficit of $212 billion in July 2022, the tenth month of FY2022. This deficit was the difference between $272 billion in receipts and $484 billion in spending. This is the second largest single month deficit this fiscal year, but still $90 billion less than July 2021. July receipts were up by $10 billion (4%), as outlays decreased by $80 billion (14%) compared to this time last year.

Analysis of notable trends: Over the first 10 months of FY2022, the federal government ran a deficit of $727 billion—29% the size of the $2.5 trillion deficit over the same period in FY2021. So far this year, revenues were $789 billion (24%) higher than over the same period in FY2021. Individual income and payroll tax receipts increased by $709 billion (25%) over the same period, in part because wages and salaries remained high amid a tight labor market. Customs duties and excise tax receipts went up by $18 billion (27%) and $11 billion (19%) respectively, reflecting increased domestic and international economic activity this year.

To date, outlays were $1.0 trillion (17%) lower than the same 10-month period in FY2021 due to the continued phasing out of pandemic-related programs that were still fully in effect in July 2021. Notably, federal spending on certain refundable tax credits expanded under the American Rescue Plan Act of 2021 was the largest drop at $270 billion, a $450 billion decrease (62%) compared to the same time last fiscal year. Unemployment compensation saw a $318 billion (91%) decrease in spending over the same time period—and a $26 billion (93%) drop in the month of July alone—reflecting improving employment trends and the end of the enhanced UI benefits that were enacted earlier in the pandemic.

Spending did, however, increase during this 10-month period for some Treasury Department programs that were expanded during the height of the pandemic, such as tax credits for employers for sick and family leave, employee retention, health insurance for certain workers, and child and dependent care. The Agriculture Department’s Food and Nutrition Service also saw increased spending of $30 billion (23%), reflecting higher average SNAP benefits and more meals provided to students nationwide during the 2021-2022 school year. Outlays for Social Security, Medicaid, and Medicare increased by $135 billion (7%) so far this fiscal year, while net interest on the public debt also continued to climb by $93 billion (28%).

Tracking the Federal Deficit: June 2022

The Congressional Budget Office estimates that the federal government ran a deficit of $88 billion in June 2022, the ninth month of FY2022. This deficit was the difference between $461 billion in receipts and $548 billion in spending and was roughly half the size of the deficit recorded in June 2021.This year’s June receipts were up by $11 billion (3%) compared to last year, as individual tax refunds declined $16 billion (64%) less than they were last June due in part to changes in tax-filing deadlines.

Analysis of notable trends: Over the first nine months of FY2022, the federal government ran a deficit of $514 billion—23% the size of the deficit over the same period in FY2021 ($2.2 trillion), and 69% of that recorded at this point in FY2019 ($746 billion), prior to the COVID-19 pandemic. Strong revenue growth and lower levels of spending contributed to the shrinking deficit. So far this year, revenues totaling $3.8 trillion were $779 billion (25%) greater than over the same period in FY2021. Individual income and payroll tax receipts largely drove this spike, increasing $690 billion (27%) as wages and salaries continued to increase amid a tight labor market. Corporate tax revenues also rose by $41 billion (15%). Unemployment insurance receipts rose by $14 billion (36%) as states continued to replenish their trust funds, and customs duties and excise tax receipts went up by $16 billion (29%) and $11 billion (21%) respectively, reflecting an increase in imports and economic activity.

Outlays for the fiscal year to date were $945 billion (18%) lower than the same nine-month period in FY2021 due to last year’s ongoing fiscal response to the COVID-19 pandemic. Outlays for the Small Business Administration continued to be among the largest drops—decreasing by $303 billion (93%)—as new loans under its pandemic-response, the Paycheck Protection Program (PPP) ended in FY2021. Additionally, federal spending on unemployment compensation outlays decreased by $292 billion (90%) due to the declining unemployment and the expiration in September 2021 of enhanced benefits that were enacted earlier in the pandemic. Other significant declines in spending year to date included the Treasury Department’s temporary payroll support for the aviation industry (-$30 billion) and its Emergency Rental Assistance Program (-$25 billion).

Through the first nine months of FY2022, outlays for major mandatory spending programs—Social Security, Medicaid, and Medicare—increased by $118 billion (7%). Notably, inflationary trends contributed to an increase in average Social Security benefits, Veterans benefits, and Supplemental Nutrition Assistance Program benefits, among others. Interest on the public debt also continued to be one of the fastest-growing slices of the budget, up $76 billion (26%) so far this year.

Tracking the Federal Deficit: May 2022

The Congressional Budget Office estimates that the federal government ran a deficit of $63 billion in May 2022, the eighth month of FY2022. This deficit was the difference between $389 billion in receipts and $452 billion in spending, down from a $132 billion deficit in May 2021. In both years, May 1 fell on a weekend, shifting certain federal payments that would have otherwise been paid in May. These shifts decreased outlays by $65 billion in May 2022 and by $60 billion in May 2021. If not for these timing shifts, the deficit in May 2022 would have been $127 billion, $64 billion less than May 2021’s deficit without timing shifts. The following discussion excludes the effects of these timing shifts.

Analysis of notable trends: Over the first eight months of FY2022, the federal government ran a deficit of $423 billion—approximately one fifth of the $2.1 trillion deficit over the same period in FY2021. Notably, the deficit as of May was smaller than the deficit over the first eight months of FY2019 ($739 billion), which predated the COVID-19 pandemic. Both strong revenues growth and lower levels of spending contributed to the shrinking deficit. Through the first eight months of FY2022, revenues were higher by $768 billion (29%) than over the same period in FY2021. Higher individual income and payroll tax receipts largely drove this spike, as wages and salaries continued to rise in a tight labor market. Additionally, corporate tax revenues rose by $33 billion (17%), unemployment insurance receipts rose by $13 billion (34%) as tax rates went up to replenish state trust funds, and customs duties went up by $15 billion (30%) because of higher imports.

Through the first eight months of the fiscal year, outlays were $873 billion (18%) lower than the same period during FY2021. The expiration or phasing out of pandemic relief spending was a major factor. For example, spending on refundable tax credits constituted the largest decline, decreasing by $421 billion (63%), which reflects the Economic Impact Payments that went out last year. Outlays for the Small Business Administration (SBA) also fell sharply, decreasing by $271 billion (92%). In the first eight months of FY2021, SBA spent $294 billion, largely on loans to small businesses under the Paycheck Protection Program (PPP). Additionally, unemployment compensation outlays decreased by $254 billion (90%). This decrease is due to the expiration in September 2021 of enhanced benefits that were enacted earlier in the pandemic, as well as lower levels of unemployment.

In contrast, outlays for major mandatory spending programs (Social Security, Medicare, and Medicaid) increased by $101 billion (7%). Most notably, Medicaid outlays rose by $47 billion (14%). Enrollment remains elevated because the Families First Coronavirus Relief Act requires states to maintain eligibility of all enrollees for the duration of the public health emergency. Other significant increases in spending included the Food and Nutrition Service (up $35 billion or 36%), the Department of Education (up $27 billion or 37%, as more of the pandemic-related emergency grants got allocated), and the Public Health and Social Services Emergency Fund (up $26 billion or 54%, as pandemic-related expenditures increased). Finally, interest on the public debt continues to be one of the fastest-growing pieces of the budget, up by $73 billion (29%) fiscal year to date.

Tracking the Federal Deficit: April 2022

The Congressional Budget Office (CBO) estimates that the federal government ran a surplus of $308 billion in April 2022, the seventh month of fiscal year 2022. This surplus was the difference between $864 billion in receipts and $556 billion in spending. April’s surplus compares to a $226 billion deficit in April 2021, with the dramatic change primarily due to the winding down of most pandemic relief spending and income tax receipts arriving in April 2022 that were delayed during the last fiscal year. In both 2021 and 2022, May 1 fell on a weekend, shifting some outlays into April that would normally have occurred in May. If not for those shifts, the April 2022 surplus would have been $373 billion and the April 2021 deficit would have been $166 billion. The following discussion excludes the effects of those timing shifts.

Analysis of notable trends: The federal government typically runs a surplus in April, the month when most taxpayers pay individual income taxes. However, due to high levels of pandemic relief spending and the IRS’s decision to delay Tax Day in 2020 and 2021, April 2022 marked the first April surplus since 2019.

The FY2022 cumulative deficit continues to more closely track pre-pandemic deficits, in contrast to the record-high levels of the past two years. Through the first seven months of FY2022, the federal government ran a deficit of $295 billion, $1.58 trillion (84%) less than at the same point in FY2021. Notably, the deficit as of April was smaller than the deficit over the first seven months of FY2019 ($530 billion), which predated the COVID-19 pandemic.

The recent pattern of strong receipts continued, totaling $3 trillion during the first seven months of FY2022—$843 billion (39%) higher than at the same point last fiscal year. Individual income and payroll taxes together rose by $760 billion (42%), largely driven by a $445 billion (119%) spike in non-withheld payments of income and payroll taxes. Part of this growth is driven by the IRS’ extension of the deadline for filing tax returns in 2021, which pushed revenues that would typically arrive in April into May. This year, Tax Day returned to its normal timing and those payments arrived in April. Nonetheless, taxes withheld from workers’ paychecks rose by $314 billion (20%), indicating that strong economic performance and higher total wages and salaries fueled a portion of FY2022’s revenue increase. Moreover, this fiscal year’s receipts have been significantly higher than CBO’s expectations. CBO now anticipates that total FY2022 revenues will be $400 to $500 billion above projections.

Through the first seven months of FY2022, outlays fell by $734 billion (18%) relative to the prior fiscal year, reflecting the ongoing decline of COVID-19 relief spending. Spending on certain refundable tax credits continued to constitute the largest decrease in outlays, dropping by $406 billion (63%). Outlays for unemployment compensation and spending by the Small Business Administration fell by $221 billion (89%) and $220 billion (92%) year-over-year, respectively. Partially offsetting these decreases, outlays on the largest mandatory spending programs rose. Combined spending on Social Security benefits, Medicare, and Medicaid rose by $83 billion (6%) year-over-year. Additionally, interest payments on the public debt spiked by $54 billion (25%) compared to FY2021, as higher inflation drove up the cost to the government of servicing inflation protected securities.

Tracking the Federal Deficit: March 2022 

The Congressional Budget Office estimates that the federal government ran a deficit of $191 billion in March 2022, the sixth month of fiscal year 2022. This shortfall was the difference between $315 billion in receipts and $506 billion in spending. The March 2022 deficit was $469 billion (71%) smaller than the March 2021 deficit, largely a result of the winding down of most pandemic relief spending that was in place during March 2021.  

Analysis of notable trends: Halfway through fiscal year 2022, the cumulative deficit has fallen relative to last year and is now comparable to pre-COVID deficits. Through the first six months of FY2022, the federal government ran a deficit of $667 billion, 61% less than at the same point in FY2021 ($1.7 trillion) and in the ballpark of the FY2019 and FY2020 deficits, which stood at $691 billion and $743 billion, respectively.  

Revenues remained strong, rising $418 billion (25%) from the same period in FY2021 to a total of $2.1 trillion during this fiscal year to date. Increases in individual income and payroll tax receipts rose by $357 billion (24%) and drove much of the overall surge in receipts. Higher total wages and salaries, especially among upper-income workers who are subject to higher tax rates, contributed to the increase in those tax revenues, as did the receipt of some payroll taxes that pandemic relief legislation authorized companies to defer from 2020 into 2021. Corporate income tax revenues rose by $22 billion (22%) year-over-year.  

Through the first six months of FY2022, outlays fell by $622 billion (18%) relative to the prior fiscal year, reflecting the continued decline in pandemic relief spending. Despite continued advance payments of the expanded Child Tax Credit during the fall, spending on refundable tax credits dropped by $366 billion (64%) year-over-year. The majority of the second and third round of stimulus checks were disbursed in January and March 2021, driving spending on refundable tax credits during the past fiscal year. Outlays for unemployment compensation decreased by $186 billion (89%) this year, both because enhanced benefits expired in September 2021 and overall unemployment declined. Unemployment compensation outlays through the first half of FY2022 ($23 billion) approximated the level of spending through the first six months of FY2020 ($18 billion), which immediately preceded pandemic relief efforts. Also, because of the conclusion of certain COVID-19 relief programs, outlays by the Small Business Administration—which spent nearly $1 trillion in response the pandemic—fell by $165 billion (90%) year-over-year.  

In contrast, outlays for major mandatory spending programs increased. Spending on Social Security benefits rose by $33 billion (6%) through the first six months of FY2022 due to an increase in the number of beneficiaries and higher monthly benefit amounts. As a result of high inflation, Social Security beneficiaries received a 5.9% cost-of-living adjustment (COLA) for 2022, the largest since 1982.  

Tracking the Federal Deficit: February 2022 

The Congressional Budget Office estimates that the federal government ran a deficit of $216 billion in February 2022, the fifth month of fiscal year 2022. February’s deficit followed a surplus in January and was the difference between $290 billion in revenues and $506 billion in spending. This deficit level is $95 billion (30%) less than the deficit recorded in February 2021.  

Analysis of notable trends: In the first five months of FY2022, the federal government ran a deficit of $475 billion, 55% less than at this point in FY2021 ($1.047 trillion). The cumulative deficit for FY2022 thus far is $149 billion (24%) lower than even the deficit over the comparable period in FY2020, pre-dating the onset of the COVID-19 pandemic. 

Receipts continue to grow robustly at $1.8 trillion for FY2022 to date, $371 billion (26%) more than the government collected during the first five months of the prior fiscal year. Individual income and payroll tax receipts increased by 25% ($313 billion), reflecting rising wages and salaries primarily among higher-income workers subject to higher tax rates, as well as the influx of some payroll taxes that companies were allowed to defer under pandemic relief legislation. Corporate income tax revenues increased by 31% ($28 billion) over the past five months compared to the same period last fiscal year. 

Fiscal year to date, federal outlays have fallen by $201 billion (8%) year-over-year to $2.3 trillion, fueled by a decline in new spending for pandemic relief that continues the trend seen in recent months. An 87% ($139 billion) drop in unemployment compensation was a major factor, thanks to a rebounding labor market—the unemployment rate now stands at just 3.8%—and the expiration of enhanced unemployment benefits in September 2021. Outlays for refundable tax credits also declined, dropping by 24% ($49 billion), as most economic impact payments authorized under the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 were disbursed in January 2021, with no such payments during the current fiscal year. (The advance Child Tax Credit payments for October, November, and December 2021 did, however, slightly offset this decrease.) Lower spending on Small Business Administration programs, such as the Paycheck Protection Program, has also contributed to the overall reduction in outlays, falling by 83% ($81 billion) compared to the same period in FY2021.  

Prompted by rising inflation and the associated adjustments to the principal amounts of inflation-protected securities, net interest on the public debt rose by 22% ($31 billion) year-over-year to $174 billion for the fiscal year to date. 

Tracking the Federal Deficit: January 2022

The Congressional Budget Office estimates that the federal government ran a surplus of $119 billion in January 2022, the fourth month of fiscal year 2022. January’s surplus was the first recorded since September 2019, and it was the difference between $467 billion in revenues and $348 billion in spending. In comparison, last January, the federal government ran a $163 billion deficit. Additionally, both this year and last year, the timing of the New Year’s Day federal holiday shifted some payments that would have normally been due at the beginning of January into December. In the absence of these timing shifts, the federal government would have run a smaller monthly surplus in January 2022 of $95 billion.

Analysis of notable trends: In the first four months of FY2022, the federal government ran a deficit of $259 billion, $477 billion (65%) less than at this point in FY2021. It is noteworthy, however, that the cumulative deficit for FY2022 thus far compares favorably to that of FY2020 ($389 billion), prior to the onset of COVID-19.

Receipts have grown robustly, totaling $1.5 trillion for the fiscal year to date, which is $331 billion (28%) more than the government collected during the first four months of FY2021. Individual income and payroll taxes together rose 28% ($284 billion), reflecting higher wages and salaries primarily among higher-income households. Additionally, initial COVID-19 relief legislation allowed employers to defer certain 2020 payroll tax payments, part of which came due January 3, 2022. Corporate income tax revenues were also up by 29% ($25 billion).

During the first four months of FY2022, federal outlays fell by $146 billion (8%) year-over-year to $1.8 trillion, fueled by a decline in new spending for pandemic relief efforts. Unemployment compensation decreased by 86% ($98 billion) due to a rebounding labor market and last fall’s expiration of enhanced benefits. Meanwhile, outlays for refundable tax credits declined by 48% ($77 billion) primarily because the second round of pandemic relief stimulus checks to households were paid in January last year (offset slightly, however, by advance payments of the Child Tax Credit made during the final months of last year). Further contributing to this reduction in net outlays was $81 billion in offsetting receipts from a Q4 2021 wireless spectrum auction.

Notably, net interest on the public debt rose 22% ($25 billion) to $140 billion for the fiscal year to date, primarily reflecting the impact of rising inflation on adjustments to the principal of inflation-protected securities.

Tracking the Federal Deficit: December 2021

The Congressional Budget Office estimates that the federal government ran a deficit of $20 billion in December 2021, the third month of fiscal year 2022. This deficit was the difference between $486 billion in revenues and $507 billion of spending. December’s deficit was 85% ($123 billion) smaller than that of December 2020. Additionally, both this year and last year, the timing of the New Year’s Day federal holiday shifted payments that would normally have occurred at the beginning of January into December. In the absence of these timing shifts, the federal government would have run a monthly surplus in December 2021 (of $4 billion) for the first time since January 2020, prior to the onset of the COVID-19 pandemic.

Analysis of notable trends: Through the first quarter of FY2022, the federal government has run a deficit of $377 billion, $196 billion (34%) less than at this point in FY2021. After factoring in the aforementioned timing shifts, the FY2022 deficit to date is $353 billion, or 33% smaller than FY2021—the rest of this discussion accounts for these payment shifts. However, this deficit is $17 billion (5%) larger than the deficit accrued during the first quarter of FY2020, before the start of the pandemic.

Receipts totaled $1.1 trillion through the first three months of the fiscal year, $248 billion (31%) more than the government collected in the first quarter of FY2021. Individual income and payroll taxes together rose by 31% ($206 billion), reflecting higher wages and salaries, particularly among higher-income individuals. Additionally, early COVID-19 relief legislation allowed employers to defer certain payroll tax payments that were due in 2020, and half of them had to be paid by December 31, 2021. Furthermore, for most businesses, the first quarterly income tax payment of the fiscal year was due on December 15. These receipts were robust: Through the first quarter, corporate income tax revenue rose 44% ($30 billion) year-over-year, indicative of the continued vitality of the U.S. economy.

Across the first quarter of FY2022, spending ticked up by $75 billion (6%) year-over-year to a total of $1.4 trillion. Pandemic response efforts largely drove this increase. Outlays for certain refundable tax credits rose by 347% ($59 billion), with Advance Child Tax Credit payments accounting for most of this spike. Spending by the Small Business Administration, the Public Health Social Services Emergency Fund, the Department of Education, and the Department of Agriculture’s Food and Nutrition Service continued to pace well above FY2021 levels, notching increases of 212%, 183%, 86%, and 60%, respectively. On the other hand, outlays for unemployment compensation plummeted by 84% ($67 billion), attributable to both the expiration of enhanced benefits in September 2021 and increased employment.

Tracking the Federal Deficit: November 2021

The Congressional Budget Office estimates that the federal government ran a deficit of $193 billion in November, the second month of fiscal year 2022. This deficit was the difference between $474 billion of spending and $281 billion of revenue. November’s deficit was 33% ($48 billion) larger than the deficit recorded in November 2020. However, spending last November was artificially lowered by the fact that November 1 fell on a weekend, shifting $63 billion worth of payments into late October. If not for the timing shift, this November’s deficit would have been 7% ($15 billion) less than that of November last year.

Analysis of notable trends: Through the first two months of FY2022, the federal government has run a deficit of $358 billion—$71 billion less than at this point last year—as spending rose 4% and revenues surged 24% this year, reflective of the nation’s ongoing economic recovery.

Certain key pandemic response efforts that fueled last year’s deficits have wound down: For example, in October and November alone, outlays for unemployment compensation decreased by $43 billion (82%) year-over-year, driven by the expiration of enhanced benefits as well as lower levels of unemployment. Other new COVID-19 relief programs, however, contributed to the overall year-over-year increase in outlays. Expenditures for certain refundable tax credits, such as the Advance Child Tax Credit payments that were expanded in pandemic-response legislation and rolled out in July 2021, rose by $38 billion (325%) relative to this time last year. Pandemic relief programs also drove spending increases for the Public Health Social Services Emergency Fund, the Department of Education, and the Department of Agriculture’s Food and Nutrition Service by 160%, 77%, and 58%, respectively, during the first two months of the fiscal year.

Individual income and payroll tax receipts together rose by $96 billion (24%) compared to October and November 2020, fueled by higher total wages and salaries. Early COVID-19 relief legislation, however, allowed employers to defer certain payroll tax payments, shifting into this year some payroll tax receipts that would have otherwise been collected last year. Continuing a trend of recent months, unemployment insurance receipts rose by $8 billion as states replenish their unemployment insurance trust funds. Looking ahead, most companies owe their first quarterly estimated income tax payments for 2022 on December 15, 2021, which should provide further insight into the pace of the country’s recovery.

Tracking the Federal Deficit: October 2021 

The Congressional Budget Office estimates that the federal government ran a deficit of $167 billion in October, the first month of fiscal year 2022. This deficit is the difference between an estimated $285 billion in revenues and $451 billion in outlays.   

October’s deficit is 41% ($117 billion) less than the $284 billion deficit recorded in October 2020, the first month of FY 2021. A 20% year-over-year upswing in revenues due to higher individual income and payroll taxes, complemented by a reduction in outlays (13% lower) from waning COVID-19 relief spending this year, drove the year-over-year deficit decline. 

Fiscal Year 2021 in Review

The federal government ran a deficit of $2.8 trillion in fiscal year 2021, the difference between $4.0 trillion in revenues and $6.8 trillion in spending. This deficit was 12% lower ($362 billion less) than in fiscal year 2020, due to revenue increases outpacing expenditure growth. The FY2021 deficit, however, was almost three times that of FY2019 ($1.8 trillion greater), as federal COVID-19 relief spending has continued to drive outlays to record highs. This year’s deficit amounted to approximately 13% of GDP, the second largest deficit as a share of the economy since 1945. Revenues tallied 18% of GDP, while spending rose to 30% of GDP.

Receipts totaled $4.0 trillion in FY2021—an 18% ($627 billion) year-over-year increase—reflecting the general strength of the economy during the initial stages of the pandemic recovery. Individual income and payroll tax revenues together rose 15%, due to a combination of higher wages, increased employment, and payroll taxes that had been deferred by most employers from 2020 to 2021 per the CARES Act of March 2020. Corporate tax revenues increased by 75% in part due to higher corporate profits, and unemployment insurance receipts increased by 31% as states replenished their unemployment insurance trust funds.

Meanwhile, outlays in FY2021 rose by 4% ($265 billion) from FY2020, largely driven by the continued federal response to the pandemic, where many relief programs were in place for more months during this past year than in FY2020. In contrast, spending by the Small Business Administration and for unemployment compensation—each of which ballooned during FY2020—decreased by 44% and 17% respectively from last year. Spending on these programs, however, remained hundreds of billions of dollars higher than in FY2019. Additionally, compared to FY2020, spending in FY2021 increased by:

• $363 billion in refundable tax credits, including economic impact payments and advanced Child Tax Credit payments
• $94 billion in COVID-19 relief for state and local governments
• $63 billion for Medicaid, largely due to pandemic relief
• $57 billion for the Department of Education, primarily for emergency COVID-19 relief to support K-12 and post-secondary education
• $50 billion for the Department of Agriculture, primarily for SNAP benefits and pandemic assistance to farmers
• $39 billion in Social Security benefits, due to increases in both the number of beneficiaries and the average benefit payment
• $33 billion in grants to state and local governments to support low-income households with emergency rental assistance
• $25 billion in net interest on the public debt

As winter approaches, the trajectory of the pandemic and its impact on the deficit remain intertwined yet deeply uncertain. Will new variants pump the breaks on the country’s economic recovery, decreasing revenues? Will vaccine mandates and eligibility for younger children decrease caseloads and give Americans confidence to shop and travel, promoting consumer spending? If, like last year, the pandemic takes a turn for the worse during the cooler months, will the federal government decide that the economy needs another jolt of stimulus? The answers to these questions and others will shape the federal government’s financial standing for fiscal year 2022.

Tracking the Federal Deficit: September 2021

The federal deficit for September 2021 was $59 billion, approximately $65 billion (52%) less than the deficit for September 2020. This deficit was the difference between revenues of $460 billion and spending of $519 billion. Although individual and corporate tax payments in September typically produce a large surplus, COVID-19 relief spending eclipsed them and led to a September deficit for the second year in a row.

Revenues increased by $87 billion (23%) in relation to the same month last year. The increase was mostly caused by a 23% rise in income and payroll taxes and a 71% increase in corporate income tax receipts.

Spending rose $22 billion (4%) year-over-year. Notably, spending by the Department of Education was 107% higher than in September 2020. An upward revision of $95 billion to the department’s estimated net subsidy costs of loans and loan guarantees was driven partially by pandemic-related causes—including the extension of pauses on the payment of loan principal and interest and the collection of loans in default—and partially by re-estimates of how much the federal government would be repaid on its outstanding portfolio. Spending on refundable tax credits increased $21 billion year-over-year primarily due to the monthly advanced Child Tax Credit payments authorized by the American Rescue Plan earlier this year.

Decreased outlays on other pandemic-response efforts in September offset some of this spending growth. Department of Homeland Security outlays shrank 74% year-over-year, as certain payments such as unemployment benefits that disbursed through the Disaster Relief Fund in September 2020 were not repeated in 2021. Unemployment compensation from the Department of Labor was also 57% lower this September compared to last, as expanded unemployment benefits expired early in the month.

Tracking the Federal Deficit: August 2021

The Congressional Budget Office estimates that the federal government ran a deficit of $173 billion in August, the eleventh month of fiscal year 2021. Because August 1 fell on a weekend this year, certain large federal payments that typically pay out on the first of the month were shifted into late July. If not for this timing shift, the August deficit would have been $233 billion—$60 billion greater than reported. Monthly revenues rose 20% ($45 billion) compared to last August, primarily due to increased income and payroll tax receipts. Spending increased by 4% ($17 billion) year over year, driven by changes in pandemic response spending.

So far this fiscal year, the federal government has run a cumulative deficit of $2.7 trillion, the difference between $3.6 trillion in revenue and $6.3 trillion in spending. This deficit is 10% lower ($295 billion less) than over the same period in FY2020, but more than 150% larger than the FY2019 deficit ($1.6 trillion greater) at this point in the year.

Analysis of Notable Trends: With one month to go until the close of fiscal year 2021, the federal government is on track to record a somewhat smaller deficit than last year. The economic recovery has buoyed revenues, and the tapering of some large pandemic relief programs has slowed growth in outlays.

Revenues in 2021 have increased 18% ($539 billion) year-to-date compared to 2020. Corporate tax revenues alone are up 77% ($125 billion) year-over-year. After declining from 2019 to 2020, individual income tax receipts have bounced back this year, rising 26% ($382 billion) over the same 11-month period in 2020.

Cumulative year-to-date outlays increased 4% ($245 billion) compared to the first 11 months of FY2020, with high expenditure levels driven by COVID-19 relief programs. While federal spending in response to the pandemic has occurred throughout the entirety of FY2021—compared to approximately only three quarters of FY2020—some of it has decreased year-over-year. Small Business Administration outlays are 44% ($256 billion) less than over the same period last year, reflecting the gradual reduction of spending towards pandemic assistance programs like the Paycheck Protection Program and Economic Injury Disaster Loan program. As the economy added back jobs that were lost in 2020 and some states ended enhanced unemployment benefits early, spending on unemployment compensation was down 14% ($61 billion) compared to last year.

Total outlays through August, however, were 52% ($2.1 trillion) greater than they were over the same period in FY2019. Certain pandemic response efforts have contributed to high spending levels in recent months, including advanced Child Tax Credit payments, Coronavirus Relief Fund payments to state and local governments, and emergency rental relief.

Tracking the Federal Deficit: July 2021

The Congressional Budget Office estimates that the federal government ran a deficit of $301 billion in July, the tenth month of fiscal year 2021. Because August 1 fell on a weekend in both 2020 and 2021, certain federal programs that typically pay out large sums on the first of the month did so twice in July. If not for these timing shifts, the deficit would have been $60 billion less last month. July’s deficit was the difference between $261 billion in revenue and $562 billion in spending. Monthly receipts dropped 54% ($302 billion) compared to last July due to 2021’s return to the regular April and June tax filing deadlines for individual and corporate tax payments. (Those deadlines had been delayed until July in 2020.)

So far this fiscal year, the federal government has run a cumulative deficit of $2.5 trillion, the difference between $3.3 trillion in revenue and $5.9 trillion in spending. This deficit is 10% lower ($269 billion less) than over the same period in FY2020, but nearly triple the FY2019 deficit ($1.7 trillion greater).

Analysis of Notable Trends: Fiscal patterns over the past month continue to reflect the federal government’s response to the COVID-19 pandemic, as well as the developing economic recovery.

Growth in federal revenues remains robust, increasing 17% ($494 billion) compared to the same 10-month period in FY2020. This increase is indicative of a strengthening economy, with a steady inflow of individual income and payroll taxes from higher total wages and salaries, and corporate taxes from larger corporate profits, the latter of which increased 76% ($121 billion) year-over-year.

Cumulative year-to-date outlays increased 4% ($225 billion) compared to the first 10 months of FY2020, again driven by pandemic-relief programs. These include a $318 billion increase (79%) in spending for economic impact payments and refundable tax credits, which were expanded this fiscal year under the American Rescue Plan Act of 2021. Additionally, outlays from the Coronavirus Relief Fund increased $62 billion (42%) year-over-year. On the flipside, Medicare outlays declined 12% ($76 billion) compared to the same period in FY2020, as the expansions carried out under the Coronavirus Aid, Relief, and Economic Security Act of 2020 increased outlays last July and have since dissipated. Total outlays this year are still 57% ($2.1 billion) greater than the same period in FY2019, demonstrating the lasting effect of COVID-19 relief programs on the federal budget.

Finally, it is noteworthy that as a result of rising inflation and growing debt, the federal government paid $10 billion more in interest on the public debt last month than it did in July 2020.

Tracking the Federal Deficit: June 2021

The Congressional Budget Office estimates that the federal government ran a deficit of $173 billion in June, the ninth month of fiscal year 2021. June’s deficit was the difference between $450 billion in revenue and $623 billion in spending.

So far this fiscal year, the federal government has run a cumulative deficit of $2.2 trillion, the difference between $3.1 trillion in revenue and $5.3 trillion in spending. This deficit is nearly triple the shortfall over the same period in FY2019 ($1.5 trillion greater), but is 19% ($508 billion) lower than at the same point in FY2020. This is the first time in FY2021 that the cumulative deficit has decreased year-over-year.

Analysis of Notable Trends: Thus far in FY2021, year-over-year comparisons of deficit levels have largely reflected the trajectory of the COVID-19 pandemic and subsequent federal response. BPC expects this trend to continue through the rest of the fiscal year.

The driving force behind the year-over-year decrease in the cumulative deficit through June was a substantial increase in revenues. Total receipts over the first nine months of this year increased 35% ($797 billion) compared to FY2020—digging a bit deeper, this was comprised of a 30% increase ($589 billion) in individual income and payroll tax revenues, and a 192% ($176 billion) increase in corporate income tax revenues. These changes, however, are largely attributable to earlier due dates of tax payments, which were delayed until July in FY2020. Fiscal year revenues to date were also up 17% compared to FY2019 ($448 billion), partly a result of increased workers’ wages and salaries, particularly among higher-income individuals who pay the majority of federal income taxes.

Total spending in June was $623 billion, a $482 billion drop compared to June 2020. Much of this difference can be attributed to a $480 billion decrease in federal outlays from the Small Business Administration, whose significant COVID-19 relief obligations—such as the Paycheck Protection Program—accounted for almost half of government spending in June 2020 following the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Additionally, unemployment compensation outlays decreased $76 billion year-over-year, largely because: 1) weekly unemployment insurance benefits included a $600 federal supplement in June 2020 but only a $300 federal supplement in June 2021; and 2) fewer people are now collecting benefits due to lower unemployment and more stringent eligibility rules in some states.

Cumulative year-to-date outlays are up 6% ($289 billion) compared to the first nine months of FY2020 and are 58% ($1.9 trillion) greater than at this point in FY2019. These changes are indicative of continued spending towards COVID-19 relief programs—in particular, refundable tax credits and supplemental unemployment compensation—as every month to date in the current fiscal year has contained pandemic-related expenditures, whereas only March-June did for the relevant period last year.

Tracking the Federal Deficit: May 2021

The Congressional Budget Office estimates that the federal government ran a deficit of $132 billion in May, the eighth month of fiscal year 2021. May’s deficit was the difference between $463 billion of revenue and $596 billion of spending. To note, May spending was impacted by May 1 falling on a weekend, shifting certain payments into April that are normally paid at the beginning of May. If not for these timing shifts, the May deficit would have been $192 billion.

So far this fiscal year, the federal government has run a cumulative deficit of $2.1 trillion, the difference between $2.6 trillion of revenue and $4.7 trillion of spending. This deficit is 10% ($184 billion) greater than at the same point in FY2020—when only three months of pandemic-related spending had occurred—and 179% ($1.3 trillion) greater than at this point in FY2019.

Analysis of notable trends: The pandemic response continues to disrupt normal spending and revenue patterns. Individual income taxes are usually paid in April; however, in both 2020 and 2021, the federal government pushed back Tax Day due to COVID-19. This year, individual income taxes were due on May 17, compared to July 15 in 2020. Additionally, this year, estimated quarterly tax payments were due in April, whereas they were due in July in 2020. These shifting dates must be taken into account when considering year-over-year deficit comparisons.

Partly as a result of the earlier deadline for individual tax payment, cumulative year-to-date revenues are up significantly: 29% ($587 billion) greater than at this point during the last fiscal year. Additionally, FY2021 year-to-date revenues are 15% greater than comparable FY2019 receipts. Given that the 2019 individual tax deadline was in April, as usual, the shifted 2021 deadline cannot account for this increase. Rather, the rise stems in part from higher wages and salaries, particularly among high-income workers who contribute the largest share of income tax revenue. Corporate income tax collections are also up from FY2019, and unemployment insurance receipts are rising as states replenish their trust funds.

Federal spending remains stratospheric, primarily as a result of COVID-19 relief programs. Cumulative outlays are 20% ($771 billion) greater than at this point last fiscal year and 55% ($1.7 trillion) greater than at this point in FY2019. Every month to date in the current fiscal year has contained pandemic-related expenditures, whereas only March, April, and May did for the relevant period last year. As FY2021 progresses, and more of the comparable period of FY2020 contains pandemic relief, the cumulative year-over-year increase in spending will likely appear less stark. Recovery rebates, Small Business Administration relief programs (most notably the Paycheck Protection Program), and enhanced unemployment insurance benefits were the largest sources of increased spending in FY2021.

Tracking the Federal Deficit: April 2021

The Congressional Budget Office (CBO) estimates that the federal government ran a deficit of $225 billion in April, the seventh month of fiscal year 2021. April’s deficit was the difference between $439 billion of revenue and $663 billion of spending. If not for a shift in the timing of some payments because May 1 fell on a weekend, April’s deficit would have been $165 billion. (For the rest of this entry, all figures have been adjusted to reflect this timing shift.)

So far this fiscal year, the federal government has run a cumulative deficit of $1.9 trillion, the difference between $2.1 trillion of revenue and $4.0 trillion of spending. This deficit is 26% ($389 billion) greater than at the same point last fiscal year and 252% ($1.3 trillion) greater than at this point in fiscal year 2019.

Analysis of notable trends: In normal years, spending and revenues typically follow similar monthly patterns—an influx of individual income taxes arrives in April, corporate income taxes are paid quarterly, refundable tax credits are largely paid in February and March. These patterns allow analysts to gauge changes in federal finances by comparing each month’s spending and revenues to the same month in the prior year.

But 2020 was not a normal year (and neither is 2021). The federal response to COVID-19 created unprecedented, and often temporary, changes to spending and revenues. As a result, year-over-year comparisons now are largely capturing variations in emergency responses to COVID-19 rather than underlying trends in the government’s fiscal health. For instance, this April’s deficit was large—but 78% smaller than last April’s, when provisions in the Coronavirus Aid, Relief, and Economist Security (CARES) Act created what was then the largest monthly deficit on record. Comparisons to earlier Aprils are also tricky, since individual income tax payments due on April 15 typically cause the federal government to run a surplus in April. This year, however, the deadline for final payment of income taxes has been pushed back to May 17, making April 2021 fiscally unique. Year-over-year comparisons of monthly spending, which was 61% greater than in April 2019 (although 38% lower than the extraordinary amount in April 2020), are somewhat more informative but still largely reflect the trajectory of COVID-19 expenditures.

Cumulative year-to-date revenues are up substantially: 16% greater than at this point during the last fiscal year (although later filing deadlines in fiscal year 2020 inflate this difference) and 5% greater than in fiscal year 2019—even though the deadline for paying individual income taxes fell in April 2019 but has not yet arrived in 2021. Greater revenues this fiscal year are partly the result of growing wages and salaries—especially for higher-income workers who pay most income taxes—and, to a lesser extent, due to elevated unemployment insurance payroll taxes as states replenish their trust funds.

Even though revenues have stepped up, spending has leapt further ahead: Cumulative outlays are 21% ($687 billion) greater than at this point last fiscal year and 56% ($1.4 trillion) greater than at this point in fiscal year 2019. The growth in spending from last fiscal year is driven by the federal government’s response to the COVID-19 pandemic and recession. Every month to date in the current fiscal year has contained pandemic-related expenditures, whereas only March and April did for the relevant period last year.

Tracking the Federal Deficit: March 2021

The Congressional Budget Office (CBO) estimates that the federal government ran a deficit of $658 billion in March 2021, the sixth month of fiscal year 2021. This month’s deficit—the difference between $267 billion in revenue and $925 billion in spending—was $487 billion greater than last March’s (adjusted for shifts in the timing of certain payments). The federal deficit has now swelled to $1.7 trillion in fiscal year 2021, 129% higher than at this point last year. While revenues have grown 6% year-over-year, cumulative spending has surged 45% above last year’s pace—largely a result of the COVID-19 pandemic, its economic fallout, and the federal government’s fiscal response.

Analysis of Notable Trends: Adjusted for timing shifts, outlays in March 2021 were $517 billion greater than last March, an increase of 127%. Unemployment insurance, refundable tax credits, and the Small Business Administration’s Paycheck Protection Program accounted for most of the increase—both from March to March and from last fiscal year to this one. Spending on refundable tax credits was $346 billion higher in March 2021 than March 2020, mostly due to the payment of pandemic recovery rebates authorized by the Consolidated Appropriations Act and American Rescue Plan Act..

Revenues totaled $1.7 trillion in the first six months of fiscal year 2021. Despite the continued recession—which had only just begun to show up in budget data at this point last year—cumulative revenues have risen by $100 billion, or 6%, from the same period last year. Individual income and payroll taxes together rose $78 billion and corporate income taxes increased, on net, by $20 billion. March 2020 saw the first effects of COVID-19 on economic activity, although they were slight. Compared to that month, receipts in March 2021 were $30 billion higher, an increase of 13%. The largest revenue boosts were greater withheld (up 12%) and non-withheld individual income and payroll taxes (up 35%).

Tracking the Federal Deficit: February 2021

The Congressional Budget Office estimates that the federal government ran a deficit of $312 billion in February 2021, the fifth month of fiscal year 2021. This month’s deficit—the difference between $246 billion in revenue and $558 billion in spending—was $77 billion more than last February’s. The deficit so far in fiscal year 2021 has climbed to just over $1 trillion, an 83% year-over-year increase (adjusted for shifts in the timing of certain payments). Year-over-year, total spending has risen by 25% and revenues have increased by 5%.

Analysis of Notable Trends: Increased spending in February, and fiscal year 2021 as a whole, mostly resulted from pandemic relief legislation. For instance, the Small Business Administration’s (SBA) Paycheck Protection Program accounted for most of the $133 billion spending increase from last February to this one. SBA outlays soared to $91 billion this February compared to only $100 million in the same month last year. The other largest spending changes were greater outlays on unemployment compensation ($44 billion, up from $3 billion in February 2020) and $17 billion less in refundable tax credit payments because of a delayed start to the tax filing season this year.

Despite a historic recession, revenues were 5% higher in the first five months of fiscal year 2021 than during the same period last year (before the onset of COVID-19). This healthy growth is surprising, especially when compared to the onset of the last major recession: In the first five months of fiscal year 2009, revenues plunged 11% year-over-year.

This fiscal year’s revenues have held up in part because the pandemic recession has been so unequal. Lost jobs have overwhelmingly paid low wages, so total income—and the federal government’s revenue base—has fallen by much less than total employment. Other factors holding up revenues are more transitory. The tax filing season is delayed and COVID-19 has slowed down the IRS’s refund processing, meaning that many refunds comparable to those issued last February have not yet been issued in 2021, temporarily causing net revenues to look higher. Meanwhile, the American Rescue Plan will exempt some unemployment benefits from taxation, so a significant share of taxes already collected on these benefits will be refunded. Despite these transitory boosts to net revenue, the growth of federal revenue in the midst of such a deep contraction is impressive.

Tracking the Federal Deficit: January 2021

The Congressional Budget Office estimates that the federal government ran a deficit of $165 billion in January, the fourth month of fiscal year 2021. This month’s deficit—the difference between $552 billion of spending and $387 billion of revenue—was $132 billion greater than last January’s. But federal finances deteriorated more than the raw numbers suggest. Adjusting for shifts in the timing of some payments, the deficit this January would have been $211 billion greater than last January’s. The federal deficit has now reached $738 billion so far this fiscal year, an increase of 120% over the same point last year (adjusted for timing shifts). Compared to the same point last fiscal year, cumulative revenues have ticked up 1%, but cumulative spending has surged 27%—mostly due to the COVID-19 pandemic and the federal response to it.

Analysis of Notable Trends: After months in which COVID relief had all but run dry, Congress passed another round of aid just before the new year with the Consolidated Appropriations Act, 2021 (CAA). January was the first month in which this bill created significant new spending—largely in programs that have become the familiar drivers of outlays during the pandemic and recession. Spending on refundable tax credits, which include recovery rebates, rose $142 billion from last January. Continuing the trend since April 2020, outlays for unemployment compensation soared from January 2020 to 2021, rising from $3 billion to $34 billion. Emergency rental housing assistance ($25 billion), outlays for the Public Health and Social Services Emergency Fund (up $9 billion), and increased Medicare spending (up $7 billion, or 19%, from last January) further added to the monthly deficit.

Increased spending so far this fiscal year has likewise mostly resulted from pandemic relief. About 60% of the increase in cumulative year-to-date spending has come from refundable tax credits (up $126 billion from this point last year) and unemployment insurance benefits (up $140 billion). Outlays from the Public Health and Social Services Emergency Fund are also up $26 billion compared to the first four months of fiscal year 2020, and Medicaid spending is $29 billion greater.

Revenues rose 4% from last January, thanks to greater revenue from individual income, payroll, and corporate income tax revenue.

So far this fiscal year, revenues are up 1%. This small net increase is the result of greater revenues from non-withheld individual taxes (up 21%), corporate income taxes (up 12), and unemployment insurance revenue (up 34%). Those increases overcame revenue losses inflicted by the pandemic. Lower earnings caused a 3% fall in the amount withheld from workers’ paychecks; less consumer spending and the suspension of some aviation taxes through the end of calendar year 2020 caused revenue from excise taxes to drop by 25%; and a fall in imports led to a 13% dip in customs duties.

Tracking the Federal Deficit: December 2020

The Congressional Budget Office estimates that the federal government ran a deficit of $143 billion in December, the third month of fiscal year 2021. This deficit—the difference between $346 billion of revenue and $489 billion of spending—was made greater because January 3 fell on a Sunday, causing some payments normally made on that day to instead be made in December. If it were not for this timing shift, December’s deficit would have been $96 billion, still $55 billion greater than that of December 2019. The deficit so far in fiscal year 2021 has climbed to $572 billion, which is $215 billion more than at this point last year. While revenues in these months were nearly unchanged from last year, outlays have grown by 16% (accounting for timing shifts in payments).

Analysis of notable trends: December extended the pattern of fiscal year 2021, with little year-over-year change in revenue but a 17% rise in spending. Of all outlays, unemployment insurance benefits—which totaled $3 billion last December but $28 billion this December—contributed the most to the spending increase. (All comparison figures for spending on specific programs have been adjusted to exclude the effects of timing shifts.) This has been a trend: Unemployment insurance benefits have caused almost 40% of greater cumulative spending from this point last year, soaring from $7 billion in the first three months of fiscal year 2020 to $80 billion so far this fiscal year. December’s spending on Medicaid (up $12 billion, or 36%, from last December) and Social Security benefits (up $5 billion, or 6%, from last December) further added to the deficit.

Revenues rose 3% from last December, thanks to greater individual income and payroll tax receipts.

Tracking the Federal Deficit: November 2020

The Congressional Budget Office estimates that the federal government ran a deficit of $146 billion in November, the second month of fiscal year 2021. This deficit was the difference between $365 billion of spending and $219 billion of revenue. Spending in November, however, was artificially lowered by the fact that November 1 fell on a weekend, causing $63 billion worth of payments that would normally be made in November to be made in October instead. If those payments had been made in November as usual, this month’s spending and deficit would each have been $63 billion greater, or $428 billion (spending) and $209 billion (deficit). In the first two months of this fiscal year, the federal government has run a deficit of $430 billion, $87 billion more than at this point last fiscal year. Compared to this point last fiscal year, spending has run 9% higher while revenues have fallen by 3%.

Analysis of notable trends: The federal deficit in calendar year 2020 continues to run above comparable months in 2019, albeit by much smaller amounts than during the peak of the federal response to the COVID-19 pandemic and recession several months ago. Accounting for the effects of timing shifts, this November’s deficit was $50 billion greater than last November’s. By contrast, this June’s deficit was $805 billion greater than last June’s (also adjusted for timing shifts). With the bulk of extraordinary pandemic spending wound down, the three areas most responsible for the year-over-year increase in the monthly deficit were unemployment insurance (spending up $23 billion year-over-year), entitlements ($6 billion more on Medicare, $4 billion more on Social Security, and $4 billion more on Medicaid), and interest on the debt ($3 billion more than last November).

Revenues also fell by 3% from last November, mostly reflecting a drop in withheld individual income and payroll taxes due to lower levels of employment.

Tracking the Federal Deficit: October 2020

The Congressional Budget Office estimates that the federal government ran a deficit of $284 billion in October, the first month of fiscal year 2021. This deficit is the difference between $238 billion of revenue and $522 billion of outlays. Because November 1 fell on a weekend this year, however, certain payments that would normally be made in November were instead shifted to October, increasing the size of this month’s deficit. Without those payments, October’s deficit would have been $230 billion.

Either way, this October’s deficit is a large increase from last October’s figure of $134 billion. The year-over-year surge in the deficit is the sum of slightly lower revenues—3% lower than last October, mostly due to lower receipts of individual income taxes—and much greater outlays—37% greater than last October (23% greater when accounting for the timing shift of some payments), mainly because of the ongoing response to the COVID-19 pandemic and its economic fallout.

Fiscal Year 2020 in Review

The federal government ran a deficit of $3.1 trillion in fiscal year 2020, more than triple the deficit for fiscal year 2019. This year’s deficit amounted to 15.2% of GDP, the greatest deficit as a share of the economy since 1945. FY2020 was the fifth year in a row that the deficit as a share of the economy grew. Revenues in FY2020 fell 1% from last year, while outlays surged 47%.

The FY2020 budget splits into two distinct halves: before and after COVID-19 and its economic fallout. In the first six months of the fiscal year (October through March), the deficit was running 8% above last year’s rate; in the last six months (April through September), the deficit soared to eight times its level in those months last year.

Through March, revenues had been running 6% above FY2019, propelled by higher wages and salaries that raised individual and payroll tax receipts. In April through September, however, revenues dipped 7% below their rate from the second half of FY2019, pulled down by the loss of economic activity and legislation enacted in response to the crisis. This second-half pattern of revenues dragged down by economic losses and policy changes was present across many types of revenue. Withheld income and payroll taxes fell 8%—because of a weaker economy, with fewer jobs and lower wages; and because of policy changes, which allowed employers to defer payroll tax payments and created refundable payroll tax credits for paid sick leave, family and medical leave, and employee retention. Nonwithheld income and payroll taxes also fell 7%, while corporate income taxes fell by 21%. Both of these declines were the sum of economic losses and legislative changes to lower tax burdens.

Meanwhile, outlays in the first half of FY2020 grew 7% from last year’s rate. Then, from April through September, outlays almost doubled their level from those months last year, a $2 trillion increase. The character of spending increases also changed from the first to the second half of the year. From October through March, higher spending was driven by mandatory programs—Social Security, Medicare, and Medicaid. In the next six months, spending ballooned because of emergency responses to the pandemic and recession. Compared to the same months in FY2019, spending increased in April through September 2020 by:

• $577 billion from the Small Business Administration, mostly for the Paycheck Protection Program
• $443 billion on unemployment insurance benefits
• $274 billion in refundable tax credits, including recovery rebates
• $112 on the Public Health and Social Services Emergency Fund (which in recent months has mostly reimbursed health care providers for their pandemic-related losses and paid for testing and treatment of COVID-19)
• A new program, the Coronavirus Relief Fund, which gave aid to state, local, tribal, and territorial governments, spent $149 billion in these months.

Tracking the Federal Deficit: September 2020

Each September, the government receives substantial revenue from individual and corporate income taxes, which generally produces a monthly surplus. For example, the federal government recorded an $83 billion surplus last September (or a surplus of $31 billion after accounting for a shift in the timing of some payments). This year, however, greater spending in response to the pandemic and recession dominated the usual revenue increase, and the government ran a monthly deficit of $124 billion. This deficit was the difference between revenues of $372 billion and spending of $496 billion.

Revenue this September fell 1% from last September, the result of lost economic activity and policy changes allowing some taxes to be deferred or reduced. For instance, individual income and payroll taxes were 5% below last year’s level, while corporate income taxes fell 16%. Individual income tax refunds also increased by 68%, further lowering net revenue.

Meanwhile, spending this September was 70% greater than last September (albeit only 44% greater when accounting for a shift in the timing of some payments). Spending mostly increased in response to the economic fallout from COVID-19. For instance, spending on unemployment insurance benefits increased from $2 billion last September to $35 billion this September. Outlays from the Department of Homeland Security were $27 billion higher this September, almost entirely because of spending from its Disaster Relief Fund that paid for some unemployment compensation. Outlays from the Small Business Administration grew from $85 million last September to $1.8 billion this September. And outlays from the Public Health and Social Services Emergency Fund—which in recent months has mostly reimbursed health care providers for greater costs and lower revenue due to the pandemic and paid for testing and treatment of COVID-19—increased from $192 million last September to $7 billion this September.

Nonetheless, while spending on these programs far exceeds pre-COVID levels, it’s fallen significantly from earlier in 2020. The $62 billion spent on unemployment insurance (including outlays from the Disaster Relief Fund) in September is down 47% from its June peak of $116 billion. $1.8 billion in outlays from the SBA is 99.6% less than its June peak of $511 billion. And the $7 billion of outlays from the Public Health and Social Services Emergency Fund is 82% less than its April peak of $39 billion. Of course, these declines only reflect programs that still spent significant amounts last month. Other major relief programs—like Economic Impact Payments, relief for airline workers, or the Coronavirus Relief Fund (which sent money to state and local governments—no longer account for significant spending at all. In sum, September 2020 saw much greater spending than September 2019, but much less than earlier this year, as the previously enacted federal response to the pandemic and recession continued to wind down.

Tracking the Federal Deficit: August 2020

The Congressional Budget Office estimates that the federal government ran a deficit of $198 billion in August, the eleventh month of fiscal year 2020. This deficit—the difference between $223 billion of revenues and $420 billion of outlays—is $3 billion less than last August’s, although this apparent improvement is an illusion created by shifts in the timing of certain payments. Without these timing shifts, this August’s deficit would have been $106 billion (or 72%) greater than last August’s. The cumulative deficit in FY2020 has risen to $3.0 trillion, an increase of $1.9 trillion from this point last year.

Analysis of notable trends: Cumulative revenue for the fiscal year is down 1% from this point last year, while cumulative outlays are 46% higher. August repeated this asymmetry, with revenues 2% lower than last August’s and outlays—netting out the timing shifts described above—27% higher.

Thanks to a strong economy, this year’s revenue through March had been running 6% above last year’s. Then COVID-19 hit, and revenues from April through August have come in 9% lower than last year, due to both the loss in economic activity and legislation responding to the pandemic.

Accounting for timing shifts, about half the increase in outlays from last August to this one came from spending on unemployment insurance benefits. While that spending has soared compared to last year, it has dropped significantly from last month. Adjusted for timing shifts, spending on unemployment insurance benefits ballooned from $2 billion last August to $110 billion this July before falling to $53 billion this August. Other major spending items related to COVID-19 and its economic fallout have followed the same trajectory. Outlays from the Small Business Association—in recent months, mostly loans and guarantees under the Paycheck Protection Program—were $99 million last August, rose to $26 billion this July, and dropped to $12 billion this August (also adjusted for timing shifts). Likewise, spending from the Public Health and Social Services Emergency Fund—which, in recent months, has mostly gone to reimbursing health care providers for costs or lost revenues due to COVID-19 and providing money for testing and treatment of COVID-19—went from $183 million last August to $17 billion this July to $8 billion this August (adjusted for timing shifts).

CBO now projects that the total deficit this fiscal year will run to $3.3 trillion, more than triple last year’s and the largest deficit as a share of the economy since 1945.

Tracking the Federal Deficit: July 2020

The Congressional Budget Office estimates that the federal government ran a deficit of $61 billion in July, the tenth month of fiscal year 2020. Although this July’s deficit was actually smaller than last July’s $120 billion deficit, the change does not represent an improved fiscal condition but a mere timing shift. The deadline for non-withheld individual and corporate income taxes, normally in April, was delayed until July of this year, causing an unusual spike in July revenue (which totaled $563 billion). Even this influx of taxes was overcome by monthly outlays that, at $624 billion, were 68% greater than last July’s. The cumulative budget deficit for FY2020 now stands at $2.8 trillion, more than triple the deficit at this point last year.

Analysis of notable trends: Stepping back from monthly fluctuations caused by the change in filing deadlines, total revenue so far this fiscal year is down 1% from this point last year. Revenues through this March had actually been 6% higher than through the same point last fiscal year, as higher individual and corporate earnings led to greater individual and corporate income tax receipts. Then the pandemic hit. From April through July, revenues are 10% lower than over same months last year, a combination of economic damage and legislation that gave individuals and corporations greater tax deductions.

While revenue has sagged relative to the prior fiscal year, outlays have exploded—they have been 51% greater so far in FY2020 than at the same point in FY2019. Most of this increase has come from the federal response to the pandemic and its economic fallout, and this was once again the case in July. Federal spending on unemployment insurance benefits was $3 billion last July; it soared to $110 billion this July. A majority of the rise was due to the additional $600 in weekly benefits for all recipients. Meanwhile, outlays through the Small Business Administration rose from $103 million last July to $26 billion this July, mostly because of loans made through the Paycheck Protection Program. UI and PPP have received consistent and large surges in spending since the beginning of the federal coronavirus response: From April through July, SBA outlays have been $564 billion more this year than last, while outlays for UI benefits have risen by $358 billion. Another program that has seen a surge in coronavirus-related spending is the Public Health and Social Services Emergency Fund, which, in recent months, has mostly gone to reimbursing health care providers for costs or lost revenues due to COVID-19 and providing money for testing and treatment of COVID-19. Congress spent $243 million on this fund last July, but $17 billion this July.

Tracking the Federal Deficit: June 2020

The Congressional Budget Office reported that the federal government ran a deficit of $864 billion in June, the ninth month of fiscal year 2020. This monthly deficit is more than 100 times larger than last June’s deficit of $8 billion. This difference came from a sizable drop in revenues, which were down 28% from last June (from $334 billion to $241 billion), and especially from a massive increase in outlays, up 223% from last June (from $342 billion to $1.105 trillion). The budget deficit so far this fiscal year has surged to $2.7 trillion, $2 trillion more than at the same point last year. As exemplified by June, the cumulative difference stems from a drop in revenues—13% lower than at the same point last year—and a much bigger leap in outlays—49% higher than at this time last year.

Analysis of notable trends: June represented another record-breaking deficit. Monthly deficits continue to be pushed upward by the federal government’s response to the COVID-19 emergency: The biggest fiscal change between last June and this one was on the spending side, and the biggest spending changes were from coronavirus-related programs. Outlays from the Small Business Administration, which funds the Paycheck Protection Program, soared from $80 million last June to $35 billion this May to $511 billion this June. Almost half of all government spending in June was through the SBA. Meanwhile, federal spending on unemployment insurance benefits rose from $2 billion last June to $93 billion this May to $116 billion this June. Half of the increase between last June and this June came from the $600 per month increase in benefit amounts. Finally, the Public Health Social Services Emergency Fund—which in recent months has reimbursed health care providers for health costs or lost revenues due to the pandemic, as well as paying for COVID-19 testing and treatments—went from $300 million last June to $14 billion this June (down from $27 billion in May).

The drop in revenue between last June and this one was due almost entirely to the administration delaying the deadline for quarterly tax payments from June 15 to July 15. Monthly revenue was down $93 billion compared to a year ago, of which $43 billion came from delaying corporate tax payments while $42 billion came from delaying individual and payroll tax payments. CBO expects most of this delayed revenue to eventually be collected, although some will be lost as businesses fail before the new payment deadlines.

Tracking the Federal Deficit: May 2020

The Congressional Budget Office reported that the federal government ran a deficit of $399 billion in May, the eighth month of fiscal year 2020. This represents almost double the monthly deficit recorded in May 2019. So far this fiscal year, the budget deficit has mounted to $1.88 trillion, more than two-and-a-half times as large as at this point last year (when it was $739 billion). Total revenues so far this fiscal year are down 11% ($256 billion) compared to the same point last year, while outlays are up 29% ($886 billion).

Analysis of notable trends: CBO notes that the fiscal year so far can be split into two distinct parts: one before the new coronavirus had affected economic output and federal finances (October through March) and one in which the pandemic had ravaged both (April and May). In the pre-coronavirus part of the year, outlays and revenues were each higher than at the same point last year. During the past two months, however, outlays soared (up 30% this May compared to last) while revenues evaporated (25% lower this May than last).

Outlays have surged in response to the health emergency itself and the resulting economic fallout: for example, spending on unemployment insurance soared from $2 billion last May to $93 billion this May; spending on refundable tax credits (at this moment, mainly the Economic Impact Payments) surged from $3 billion last May to $53 billion this May; outlays from the Small Business Administration (at this moment, mostly loan guarantees from the Paycheck Protection Program) rose from $98 million last May to $35 billion this May; and spending on the Public Health Social Services Emergency Fund (in recent months, mostly reimbursing health care providers for costs and lost revenue stemming from the pandemic and paying for public health measures like testing and vaccine development) climbed from $250 million last May to $27 billion this May.

On the revenue side, most of the drop in May relative to last year is from individual income and payroll taxes, which together dropped by 24% ($51 billion). While much of this drop is due to job loss and reduced incomes, some also derives from the shift in tax deadlines passed in the CARES Act, such as the ability for employers to defer their payroll taxes until the end of this calendar year.

Tracking the Federal Deficit: April 2020

The Congressional Budget Office reported that the federal government generated a $737 billion deficit in April, the seventh month of fiscal year 2020. April’s deficit is a $897 billion swing from the $160 billion surplus recorded a year earlier in April 2019. April’s shortfall brings the total deficit so far this fiscal year to $1.48 trillion, which is 179% ($949 billion) higher than the same period last year. Total revenues so far in FY2020 decreased by 10% ($200 billion), while spending increased by 29% ($749 billion), compared to the same period last year.

Analysis of Notable Trends: The $737 billion deficit in April is by far the largest monthly shortfall as a share of the economy in the past 40 years (since the data was collected). Similarly, the $1.48 trillion deficit so far this fiscal year is on track to be the largest deficit as a share of the economy since World War II. These figures reflect the COVID-19 pandemic and the federal government’s emergency measures responding to it. In April 2020, federal income and payroll tax revenues fell 55% ($258 billion) compared to last April, primarily reflecting the millions of Americans who have been laid off or furloughed. (The income tax decline also reflects the delayed April 15 tax filing deadline.) Meanwhile, relief packages enacted by lawmakers led federal spending in April to more than double (from last April) to $976 billion. Spending on unemployment insurance rose from $3 billion in April 2019 to $49 billion this year, reflecting major expansions in the program. The recently enacted Economic Impact Payments to individual households totaled roughly $200 billion. Other major increases in April outlays were the Coronavirus Relief Fund providing aid to state and local governments of $142 billion and initial expenditures for the Paycheck Protection Program for small businesses of $15 billion. Medicare spending also tripled to $152 billion. Finally, the federal government spent an additional $40 billion on aid to health care providers for combatting COVID-19.

Tracking the Federal Deficit: March 2020

The Congressional Budget Office reported that the federal government generated a $117 billion deficit in March, the sixth month of fiscal year 2020. March’s deficit is a $30 billion decrease from the $147 billion deficit recorded a year earlier in March 2019. (If not for timing shifts of certain payments, the deficit in March would have been $169 billion, or $22 billion more than in March 2019.) March’s deficit brings the total deficit so far this fiscal year to $741 billion, which is 7% ($50 billion) higher than the same period last year. Total revenues so far in FY2020 increased by 6% ($97 billion), while spending increased by 7% ($147 billion), compared to the same period last year.

Analysis of Notable Trends in This Fiscal Year to Date: Through the first six months of FY2020, federal reserve remittances increased by 22% ($6 billion) because of lower short-term interest rates, which decreased the Federal Reserve’s interest expenses and increased its payments to the Treasury. As in previous months, the rise in spending was driven by increasing expenditures on the military (7%, or $22 billion), Social Security, Medicare, and Medicaid (6%, or $57 billion total), and net interest on the public debt (5%, or $10 billion). Notably, the March 2020 report was not significantly impacted by the new coronavirus pandemic nor the federal government’s emergency measures responding to it. CBO anticipates that those budgetary effects will be more noticeable in April.

Tracking the Federal Deficit: February 2020

The Congressional Budget Office reported that the federal government generated a $235 billion deficit in February, the fifth month of fiscal year 2020. February’s deficit is a $1 billion increase from the $234 billion deficit recorded a year earlier in February 2019. (If not for timing shifts of certain payments, the deficit in February would have been $238 billion, or $4 billion more than in February 2019.) February’s deficit brings the total deficit so far this fiscal year to $625 billion, which is 15% ($80 billion) higher than the same period last year (or $28 billion higher once timing shifts are accounted for). Total revenues so far in FY2020 increased by 7% ($88 billion), while spending increased by 9% ($168 billion), compared to the same period last year. (After accounting for timing shifts, spending rose by 6% or $116 billion.)

Analysis of Notable Trends in This Fiscal Year to Date:  Through the first five months of FY2020, individual income tax refunds fell by 6% ($5 billion), increasing net revenue, as the timing of refund payments varies annually. Customs duties rose by 14% ($4 billion), partly due to tariffs imposed by the current administration, primarily on imports from China. On the spending side, net interest on the public debt increased by 6% ($10 billion)—even amidst historically low interest rates—because the overall debt burden has risen. Outlays for the Department of Veterans Affairs rose by 7% ($6 billion) because of rising participation in veterans’ disability compensation, growing average disability benefits, and increasing spending on a program that helps veterans receive treatment in non-VA facilities.

Tracking the Federal Deficit: January 2020

The Congressional Budget Office reported that the federal government generated a $32 billion deficit in January, the fourth month of fiscal year 2020. January’s deficit is a $40 billion change from the $9 billion surplus recorded a year earlier in January 2019. (If not for timing shifts of certain payments, the federal government would actually have realized a $1 billion surplus in January 2020 and a $12 billion deficit in January 2019.) January’s deficit brings the total deficit so far this fiscal year to $388 billion, which is 25% ($78 billion) higher than the same period last year (or $23 billion higher once timing shifts are accounted for). Total revenues so far in FY2020 increased by 6% ($67 billion), while spending increased by 10% ($145 billion), compared to the same period last year. (After accounting for timing shifts, spending rose by 6% or $90 billion.

Analysis of Notable Trends in This Fiscal Year to Date: Through the first four months of FY2020, revenue from corporate income taxes rose by 27% ($16 billion). Additionally, Federal Reserve remittances increased by 14% ($3 billion) partly due to lower short-term interest rates that reduced its interest expenses. On the spending side, after accounting for timing shifts, total Social Security, Medicare, and Medicaid outlays rose by 6% ($41 billion). Outlays for the Department of Defense rose by 7% ($14 billion), largely for procurement and research and development.

Tracking the Federal Deficit: December 2019

The Congressional Budget Office reported that the federal government generated a $15 billion deficit in December, the third month of fiscal year 2020. December’s deficit is 7% ($1 billion) higher than the deficit recorded a year earlier in December 2018. (If not for timing shifts of certain payments, the deficit in December would have been roughly $42 billion, or $4 billion more than the adjusted deficit from a year ago.) December’s deficit brings the total deficit so far this fiscal year to $358 billion, which is 12% ($39 billion) higher than the same period last year. Total revenues so far in FY2020 increased by 5% ($35 billion), while spending increased by 7% ($74 billion), compared to the same period last year.

Analysis of Notable Trends in This Fiscal Year to Date: Through the first three months of FY2020, revenue from excise taxes fell by 33% ($10 billion), relative to the same period in 2018, due to a one-year moratorium of the tax on health insurance providers (the “Cadillac tax,” which has since been repealed). Conversely, revenue from customs duties increased by 18% ($3 billion) as a result of additional tariffs imposed by the current administration, primarily on imports from China. On the spending side, outlays for Department of Defense programs rose by 10% ($16 billion), mostly for procurement. Additionally, Fannie Mae and Freddie Mac began making smaller payments to the Treasury in order to replenish their capital reserves, resulting in an an 88% ($7 billion) decline in net payments (recorded in the federal budget as an increase in net outlays).

Tracking the Federal Deficit: November 2019

The Congressional Budget Office reported that the federal government generated a $207 billion deficit in November, the second month of fiscal year 2020. November’s deficit is 1% ($2 billion) higher than the deficit recorded a year earlier in November 2018. (If not for timing shifts of certain payments, the deficit in November would have been roughly $158 billion, or $2 billion lower than the adjusted deficit from a year ago.) November’s deficit brings the total deficit so far this fiscal year to $342 billion, which is 12% ($36 billion) higher than the same period last year (or $32 billion higher once timing shifts are accounted for). Total revenues so far in FY2020 increased by 3% ($12 billion), while spending increased by 6% ($49 billion), compared to the same period last year.

Analysis of Notable Trends in This Fiscal Year to Date: Through the first two months of FY2020, revenue from excise taxes fell by 40% ($9 billion), relative to the same period in 2018, due to a one-year moratorium of the tax on health insurance providers. Conversely, revenue from customs duties increased by 32% ($4 billion) as a result of additional tariffs imposed by the current administration, primarily on imports from China. On the spending side, outlays for Social Security, Medicare, and Medicaid rose by 7% ($22 billion), and spending on education rose by 25% ($3 billion), largely the result of rising subsidy costs for federal student loans.

Tracking the Federal Deficit: October 2019

The Congressional Budget Office reported that the federal government generated a $133 billion deficit in October, the first month of fiscal year 2020. October’s deficit is 33% ($33 billion) more than the deficit recorded a year earlier in October 2018.

Tracking the Federal Deficit: September 2019 (end of the fiscal year)

The Congressional Budget Office reported that the federal government generated a surplus of $83 billion in September, the final month of Fiscal Year 2019. This brings the total FY2019 deficit to $984 billion, 26 percent ($205 billion) higher than last year’s deficit. If not for timing shifts of certain payments, this year’s deficit would have been 21 percent ($162 billion) larger than the deficit in FY2018. On an apples-to-apples basis, total revenues in FY2019 increased by 4 percent ($133 billion), while spending increased by 7 percent ($294 billion), compared to the prior fiscal year.

Analysis of Notable Trends for Fiscal Year 2019: Corporate income tax revenue increased by 14 percent ($25 billion) relative to 2018, although that year notably was tied for the lowest corporate revenue level (1.0 percent) as a share of the economy since 1965, a result of the Tax Cuts and Jobs Act of 2017 (TCJA). Customs duties increased by 71 percent ($29 billion) versus last year due to the imposition of tariffs, specifically on certain imports from China. On the spending side, outlays from the refundable earned income and child tax credits increased by 14 percent ($11 billion) versus last year, reflecting expansions enacted in TCJA. Finally, payments for net interest on the public debt rose by an alarming 14 percent ($52 billion), largely due to higher short-term interest rates and a growing federal debt burden on which those interest payments are owed.

Tracking the Federal Deficit: August 2019

The Congressional Budget Office reported that the federal government generated a $200 billion deficit in August, the eleventh month of Fiscal Year 2019. This makes for a total deficit of $1.067 trillion so far this fiscal year, 19 percent ($168 billion) higher than over the same period last year. (Excluding timing shifts of certain payments, the total deficit so far this fiscal year is 17 percent—$137 billion—higher than over the same period last year.) Total revenues so far in FY 2019 increased by 3 percent ($102 billion), while spending increased by 7 percent ($271 billion), compared to the same period last year.

Analysis of Notable Trends this Fiscal Year to Date: Trends in the major categories of revenue and spending continued from previous months—compared to last year, individual income and payroll taxes collectively rose by 3 percent ($82 billion), while spending for the largest mandatory programs (Social Security, Medicare, and Medicaid) collectively increased by 6 percent ($105 billion). Revenues from customs duties increased by 72 percent ($26 billion), primarily due to new tariffs imposed on certain imports from China. Estate tax revenue decreased by 25 percent ($5 billion) due to the 2017 tax cuts which doubled the value of the estate tax exemption. Additionally, Fannie Mae and Freddie Mac remitted $16 billion more in payments to the Treasury this year. Finally, net interest payments on the federal debt continued to rise, increasing by 14 percent ($48 billion) versus last year due to higher interest rates and a larger federal debt burden.

Tracking the Federal Deficit:   July 2019

The Congressional Budget Office reported that the federal government generated a $120 billion deficit in July, the tenth month of Fiscal Year 2019. This makes for a total deficit of $867 billion so far this fiscal year, 27 percent ($184 billion) higher than over the same period last year (excluding timing shifts of certain payments, the total deficit so far this fiscal year is 20 percent—$140 billion—higher than over the same period last year). Total revenues so far in Fiscal Year 2019 increased by 3 percent ($92 billion), while spending increased by 8 percent ($276 billion), compared to the same period last year.

Analysis of Notable Trends this Fiscal Year to Date: Increased revenues were driven mostly by a 7 percent ($65 billion) increase in payroll taxes due to the strong labor market that has resulted in continued job growth and rising wages. On the spending side, outlays for Social Security, Medicare, and Medicaid increased by a combined 6 percent ($46 billion, $37 billion, and $18 billion, respectively). Department of Education outlays rose by 79 percent ($40 billion), mostly due to an upward revision to the net subsidy costs of previously issued student loans. Finally, net interest payments on the federal debt continued to rise, increasing by 14 percent ($44 billion) versus last year due to higher interest rates and a larger federal debt burden.

Tracking the Federal Deficit:   June 2019

The Congressional Budget Office reported that the federal government generated an $8 billion deficit in June, the ninth month of Fiscal Year 2019, for a total deficit of $746 billion so far this fiscal year. If not for timing shifts of certain payments, June’s deficit would have been  $57 billion, which is $28 billion (97 percent) larger than the adjusted deficit for June 2018. Total revenues so far in Fiscal Year 2019 increased by 3 percent ($69 billion), while spending increased by 7 percent ($208 billion), compared to the same period last year.

Analysis of Notable Trends this Fiscal Year to Date: Individual and payroll taxes together rose by 3 percent ($60 billion), reflecting an expanding economy and a low unemployment rate. Furthermore, customs duties increased by 77 percent ($22 billion) versus last year, primarily due to the imposition of new tariffs. On the spending side, Social Security expenditures increased by 6 percent ($42 billion) compared to last year due to increases in the number of beneficiaries and the average benefit payment. Finally, net interest payments on the federal debt continued to rise, increasing by 16 percent ($44 billion) versus last year due to higher interest rates and a larger federal debt burden.

Tracking the Federal Deficit:   May 2019

The Congressional Budget Office reported that the federal government generated a $207 billion deficit in May, the  eighth month of Fiscal Year 2019, for a total deficit of  $738 billion so far this fiscal year. May’s deficit is 41 percent ($60 billion) more than the deficit recorded a year earlier in May 2018. If not for timing shifts of certain payments, the deficit would have been 7 percent ($11 billion) larger than the deficit in May 2018. Total revenues so far in Fiscal Year 2019 increased by 2 percent ($49 billion), while spending increased by 9 percent ($255 billion), compared to the same period last year.

Analysis of Notable Trends this Fiscal Year to Date: Corporate income tax receipts were down by 9 percent ($11 billion) compared to last year, reflecting the lower marginal corporate tax rate enacted in the Tax Cuts and Jobs Act of 2017. Further, customs duties increased by 78 percent ($19 billion) versus last year, due to the imposition of new tariffs. On the spending side, Department of Defense spending increased by 10 percent ($39 billion) compared to last year, particularly on military operations, maintenance, procurement, and R&D. Finally, net interest payments on the federal debt continued to rise, increasing by 16 percent ($37 billion) versus last year due to higher interest rates and a larger federal debt burden.

Tracking the Federal Deficit: April 2019

The Congressional Budget Office reported that the federal government generated a $161 billion surplus in April, the seventh month of Fiscal Year 2019, for a total deficit of $531 billion so far this fiscal year. April’s surplus is 33 percent ($54 billion) less than the surplus recorded a year earlier in April 2018. If not for timing shifts of certain payments, the surplus would have been 5 percent ($8 billion) smaller than the surplus in April 2018. Total revenues so far in Fiscal Year 2019 increased by 2 percent ($36 billion), while spending increased by 6 percent ($135 billion), compared to the same period last year.

Analysis of Notable Trends this Fiscal Year to Date: Income tax refunds were down by 5 percent ($12 billion) compared to last tax season, contrary to many analysts’ expectations. Further, outlays from the refundable earned income and child tax credits increased by 12 percent ($9 billion) versus last year, reflecting expansions enacted in the Tax Cuts and Jobs Act of 2017. Net interest payments on the public debt continued to rise, up 13 percent ($27 billion) compared to last year, largely as a result of higher interest rates and the nation’s steadily growing debt burden.

Tracking the Federal Deficit: March 2019 

The Congressional Budget Office reported that the federal government generated a $149 billion deficit in March, the sixth month of Fiscal Year 2019, for a total deficit of $693 billion so far this fiscal year. March’s deficit is 29 percent ($60 billion) less than the deficit recorded a year earlier in March 2018. If not for timing shifts of certain payments, the deficit would have been 9 percent ($14 billion) smaller than the deficit in March 2018. Total revenues so far in Fiscal Year 2019 increased by 0.6 percent ($9 billion), while spending increased by 5 percent ($103 billion), compared to the same period last year.

Analysis of Notable Trends this Fiscal Year to Date: Customs duties increased by 86 percent ($16 billion) compared to last year. On the spending side, outlays for Social Security, Medicare, and Medicaid increased by a combined 4 percent ($26 billion, $10 billion, and $5 billion, respectively). Department of Defense spending rose by 9 percent ($28 billion), and net interest payments on the national debt were up by 13 percent ($22 billion), largely due to interest rates on short term debt being substantially higher now than they were during the first half of Fiscal Year 2018.

Tracking the Federal Deficit: February 2019 

The Congressional Budget Office reported that the federal government generated a $227 billion deficit in February, the fifth month of Fiscal Year 2019, for a total deficit of $537 billion so far this fiscal year. February’s deficit is 5 percent ($12 billion) higher than the deficit recorded a year earlier in February 2018. Total revenues so far in Fiscal Year 2019 decreased by 0.3 percent ($4 billion), while spending increased by 8.5 percent ($142 billion), compared to the same period last year.

Analysis of Notable Trends this Fiscal Year to Date: Income tax refunds were down by 10 percent ($10 billion) from October-February 2019 compared to the same period in Fiscal Year 2018, and corporate income tax receipts were down by 19 percent ($14 billion) from October-February 2019 relative to the same period in Fiscal Year 2018. The dip in corporate revenues is primarily attributable to the Tax Cuts and Jobs Act of 2017. On the spending side, Department of Homeland Security outlays decreased by 31 percent ($11 billion) due to a relative decrease in disaster spending versus last year. Conversely, net interest payments on the national debt were up 15 percent ($20 billion) from October-February 2019 compared to the same period in Fiscal Year 2018.

Tracking the Federal Deficit: December 2018 

The Congressional Budget Office reported that the federal government generated an $11 billion deficit in December, the third month of Fiscal Year 2019, for a total deficit of $317 billion so far this fiscal year. If not for timing shifts of certain payments, the deficit in December would have been roughly $32 billion, according to CBO. December’s deficit is 52 percent ($12 billion) lower than the deficit recorded a year earlier in December 2017. Total revenues so far in Fiscal Year 2019 increased by 0.1 percent ($2 billion), while spending increased by 9.4 percent ($93 billion), compared to the same period last year.

Analysis of Notable Trends in December 2018: Revenue from customs duties spiked by 83 percent ($8 billion) from October-December 2018, relative to the same period in 2017, due to the administration’s imposition of new tariffs. Conversely, corporate income tax revenue declined by 15 percent ($9 billion) from October-December 2018 relative to the same period in 2017. This dip mainly reflects the reduction of corporate tax rates enacted in the Tax Cuts and Jobs Act of 2017. On the spending side, interest payments on the federal debt in December 2018 rose by 47 percent ($11 billion) relative to December 2017.

Tracking the Federal Deficit: November 2018

The Congressional Budget Office reported that the federal government generated a $203 billion deficit in November, the second month of Fiscal Year 2019, for a total deficit of $303 billion so far this fiscal year. If not for timing shifts of certain payments, the deficit in November would have been roughly $158 billion, according to CBO. November’s deficit is 46 percent ($64 billion) higher than the deficit recorded a year earlier in November 2017. Total revenues so far in Fiscal Year 2019 increased by 3 percent ($14 billion), while spending increased by 18 percent ($115 billion), compared to the same period last year.

Analysis of Notable Trends in November 2018: Department of Homeland Security spending fell by 46 percent ($4 billion) relative to November 2017, reflecting a decrease in spending on disaster relief. Conversely, Social Security spending (benefit payments) increased by 5 percent ($4 billion) compared to November 2017.

Tracking the Federal Deficit: October 2018

Analysis of Notable Trends in October 2018:The Congressional Budget Office reported that the federal government generated a $98 billion deficit in October, the first month of Fiscal Year 2019. October’s deficit is 56 percent ($35 billion) higher than the deficit recorded a year earlier in October 2017. Total revenues increased by 7 percent ($17 billion), while spending increased by 18 percent ($55 billion), compared to a year earlier.