TheWeekInCongress.com
The Monthly Budget Review April 6, 2006
For the first half of fiscal year 2006 that began on October 1, 2005 the federal government ran a deficit of $305 billion, $10 billion more than during the same time last fiscal year.
WHAT HAPPENED?
Receipts in March were $166 billion (Up 16%) and outlays were $254 billion (Up 34%)
The deficit increase is attributed to shifts in the timing of tax returns and benefit payments based on the calendar. There was an extra friday payout day in March that sent an additional $11 billion tax refund to taxpayers.
According to the CBO the government ran a $119 billion deficit in February. The number could have been higher but tax refunds and refundable tax credits (both considered outlays) were lower than expected in that month. The March deficit was $87 billion. $16 billion more than March 2005.
WHERE THE MONEY CAME FROM
Receipts through March 2006
| 2005 | 2006 | Change | |
| Individual Income Tax | $399 billion | $436 billion | +9.3% |
| Corporate Income Tax | $100 billion | $130 billion | +30.6% |
| Social Insurance | $368 billion | $394 billion | +7.1% |
| Other | $73 billion | $79 billion | +8.8% |
| Total | $939 billion | $1,039 trillion | +10.7% |
First half of 2006 revenues surpassed first half of 2005 revenues by about $100 billion. The primary source of increased revenue was individual income taxes and payroll taxes that increased by $59 billion. A sign that the economy is strong in wages and salaries. Corporate income taxes increased by about $31 billion over the same period last year. The amounts of corporate taxes paid in March are expected to be the highest for a while because they are the last receipts from corporation tax returns this fiscal year. The CBO predicts slower growth in profits due to the expiration of certain corporate tax provisions.
WHERE THE MONEY WENT
Outlays Through March 2006
| 2005 | 2006 preliminary | Actual Change | Adjusted Change | |
| Defense-Military | $230 billion | $250 billion | +8.9% | +6.5% |
| Social Sec. Benefits | $253 billion | $269 billion | +6.0% | +6.0% |
| Medicare | $160 billion | $187 billion | +16.7% | +14.6% |
| Medicaid | $90 billion | $90 billion | -0.3% | -0.3% |
| Other programs | $413 billion | $438 billion | +6.0 | +7.1% |
| Sub-total | $1.146 trillion | $1.233 trillion | +7.6% | +7.2% |
| Net Interest on the Public Debt | $87 billion | $111 billion | +27.1% | +27.1% |
| Totals | $1.234 trillion | $1.344 trillion | +9.0% | +8.6% |
Outlays in the first half of FY 2006 were 9% higher than last year with the cost of the net interest on the public debt accounting for a quarter of the debt increase. Medicare spending was up due mostly to the President's prescription drug benefit. The increase in Medicare spending, though, equals the 15% increase during the first half of FY 2005 when there was no prescription drug program. The reduction in Medicaid spending is thought to be due to the transfer of prescription drug spending from that program to Medicare.
Defense spending increased in operations and maintenance (10%) and the 4.6% pay increase to military personnel.
Most of the increase for other programs came from $25 billion spent for Hurricane Katrina disaster relief and flood insurance.
The above information was reformatted from a CBO report prepared by Mark Booth, Chad Chirico, Barbara Edwards and Kathy Gramp of the Congressional Budget Office.
## All Rights Reserved. © 2006 TheWeekInCongress.com.(TM)
No reproduction, language translation or distribution without written permission from TheWeekInCongress.com.(TM)