Six Months Down: CBO Monthly Budget Review Estimates $714 billion deficit in FY 2010 Thus Far

The Congressional Budget Office issued its Monthly Budget Review yesterday. It estimates that the federal government incurred a deficit of $714 billion for the first six months of fiscal year 2010. This is $67 billion less than the deficit recorded for this same period last year.


Revenues were about $37 billion below last year’s levels (about 4 percent). Corporate payments were up but were offset by refunds as a result of new tax legislation that allowed corporations to apply current losses to offset prior year’s income (about 5 percent below last year’s levels). And individual income receipts were down by about 8 percent because of lower wages and the Making Work Pay tax credit.   This decline was offset by the increase of $26 billion in receipts transferred from the Federal Reserve to the Treasury. 
Outlays were down by about $104 billion (or 6 percent lower than last year).  The decline in outlays is primarily due to a decline in outlays for TARP and increases in deposit insurance (which offsets those outlays). If the net outlays for deposit insurance were excluded, other spending grew by 18 percent, including for food and nutrition programs, aid to states, and veterans’ programs.  Outlays on unemployment benefits, Medicaid, Social Security, and Medicare continue to rise.