TheWeekInCongress.com
The Monthly Budget Review June 2005
The Congressional Budget Office reports that the $273 billion deficit the government incurred from Oct 1, 2004 until May 31, 2005 is $73 billion less than the deficit incurred during the same time period last fiscal year.
Overall income from October 2003 through May 2004 was $1.186 trillion. Outlays were $1.532 trillion equaling a deficit of $346 billion.
Overall income for October 2004 through May 2005 was $1.369 trillion against outlays of $1.642 trillion for a deficit of $273 billion. The difference is $73 billion.
WHAT HAPPENED?
The improvement in debt was explained as the results of economic activity in the last two months (April and May 2005):
April 2005 stood out when the Treasury took in $278 billion and spent only $220 billion for a surplus of $58 billion.
The May 2005 spending deficit of $36 billion was $26 billion less than the $62 billion overspent in May 2004.
WHERE DID THE MONEY COME FROM?
CBO concluded that $34 billion in May 2005 revenue (90% of the revenue gain) came from income and payroll taxes of individual taxpayers and half of that $34 billion was the result of an extra business day in May 2005.
The other half is "consistent with increased wages and salaries in the economy". Revenue numbers also improved because income tax return payments were lower by about $3 billion.
| Individual income tax 2004----- | $502 billion |
| Individual income tax 2005----- | $605 billion |
| Corporate income tax 2004---- | $96 billion |
| Corporate income tax 2005---- | $142 billion |
| Social insurance 2004---------- | $493 billion |
| Social insurance 2005---------- | $525 billion |
| Other 2004-------------------- | $94 billion |
| Other 2005-------------------- | $97 billion |
| Total 2004--------------------- | $1.186 trillion |
| Total 2005--------------------- | $1.369 trillion (15.6% increase) |
WHERE DID THE MONEY GO?
| Defense / Military 2004-------- | $285 billion |
| Defense / Military 2005-------- | $307 billion |
|
Social Security Benefits 2004-- |
$323 billion |
|
Social Security Benefits 2005-- |
$340 billion |
| Medicare 2004---------------- | $195 billion |
| Medicare 2005---------------- | $214 billion |
|
Medicaid 2004---------------- |
$116 billion |
| Medicaid 2005---------------- | $120 billion |
| Other 2004-------------------- | $503 billion |
| Other 2005-------------------- | $537 billion |
|
Net Interest on Debt 2004----- |
$110 billion |
|
Net Interest on Debt 2005----- |
$123 billion |
| Total Spending 2004---------- | $1.532 trillion |
| Total spending 2005---------- | $1.642 trillion (7% increase) |
CBO EXPLAINS
"CBO estimates that outlays through May were about 7 percent higher than in the first eight months of fiscal year 2004, roughly the rate of growth expected for the year as a whole. The year-to-year growth in cumulative outlays has changed little in recent months for most major categories of spending. The one exception is outlays for net interest on the public debt, which have surged in the past few months. Interest outlays through May were $13 billion, or 12 percent, higher than in the first eight months of 2004 as a result of growing debt, rising short-term interest rates, and higher inflation (which affects the cost of inflation-indexed notes).
"Medicare spending continues to grow rapidly--up by more than 10 percent so
far this year. Significant increases in spending have also been recorded for
farm income-support and nutrition programs of the Department of Agriculture,
education programs, disaster relief activities of the Department of Homeland
Security, and refundable tax credits."
"Note: Unless otherwise indicated, the figures in this report include the Social
Security trust funds and the Postal Service fund, which are off-budget. Numbers
may not add up to totals because of rounding."
All Rights Reserved. TheWeekInCongress.com
Data: Congressional Budget Office.