MBROCT07

Legislation News & Report (TM)

TheWeekInCongress.com (TM)

Monthly Budget Review

Home

Contact: House / Senate

Newest Public Laws

Monthly Budget Review

Legislation in the Spotlight

Privacy

About Us

TheWeekInCongress.com

The Monthly Budget Review

October 2007

The end of fiscal year deficit is about $161 billion, $87 billion less than the same period last year. The amount is 1.2 percent of the gross domestic product. Last year’s percentage was 1.9%. The CBO relied on the Daily Treasury Statements for its calculations. The actual deficit amount will be posted later this month.

WHAT HAPPENED?

The August deficit was about $117 billion, a bit higher than expected due to higher spending. But September showed a surplus.

	Actual FY 2006	Preliminary 2007	Estimated Change
Receipts	$282 billion	$285 billion	$3 billion
Outlays	$227 billion	$172 billion	$55 billion
Surplus	$56 billion	$113 billion	$57 billion

The September surplus was $57 billion more than in the same month last year. September surpluses are typical because of an influx of quarterly tax revenues, the CBO said.

Payment shifts for Social Security benefits from September to August also added to the windfall. Also, due to the Labor Day holidays, $25 billion in SS benefits were made at the end of August rather than in September. Outlays for the same period in 2006 intended for October were made in September thereby raising that comparative figure. Other outlays for Education were spread out of the year further lessening the impact.

	Actual FY 2006	Preliminary 2007	Estimated Change
Receipts	$2.407 trillion	$2.568 trillion	$161 billion
Outlays	$2.655 trillion	$2.729 trillion	$74 billion
Deficit	-$248 billion	-$161 billion	$87 billion

WHERE THE MONEY CAME FROM

Receipts

Source	FY 2006	FY 2007	Change
Individual taxes	$1.044 trillion	$1.162 trillion	11.3%
Corp. Taxes	$354 billion	$372 billion	5%
Social Insurance	$838 billion	$870 billion	3.8%
Other	$171 billion	$165 billion	-3.8%
Total	$2.407 trillion	$2.568 trillion	6.7%

2007 receipts were 6.7% higher than 2006. The 2006 growth was 11.8% and 2005 came in at 14.5 %. Revenues rose to about 18.8% of the GDP, the highest percentage in the last 40 years. Individual taxes increased by 11%, payroll taxes rose by 4% and receipts from withheld individual taxes rose by 6.7%, similar to last year. Non-withheld receipts grew more slowly but reflect strong growth income from sources other than wages and salaries.

Corporate taxes rose by 5%, a number the CBO notes is significantly lower than the average of 39% per year.

WHERE THE MONEY WENT

Outlays

Category	FY 2006	FY 2007 (Preliminary)	Actual Change	Adjusted Chng
Defense	$499 billion	$526 billion	5.2%	6.1%
Social Security	$545 billion	$577 billion	5.8%	5.9 %
Medicare	$381 billion	$437 billion	14.7%	10.9%
Medicaid	$181 billion	$191 billion	5.7%	5.7%
Other	$812 billion	$747 billion	2.4%	2.1%
Debt Interest	$237 billion	$252 billion	6.5%	6.3%
Total	$2.655 trillion	$2.729 trillion	2.8%	2.5%

Outlays were 20% of the GDP in 2007 on the average of the two previous years but well below the 7.5% average over the last five years. ‘Other’ spending in 2006 was high due to continued spending for Gulf Coast hurricanes and for student loan subsidies. Payments to license the electromagnetic spectrum (broadcasting) rose.

Medicare and Medicaid spending rose on the average of the past two years. A good bit of the increase is due to the prescription drug plan that added to Medicare spending but reduced Medicaid spending.

Defense rose by 6% and the net interest on the debt rose only 6% as compared to the 24% increase in 2006.

This Report is revised from the original CBO report compiled by CBO’s Mark Booth, Chad Chirico, Barbara Edwards, and Kathy Gramp.

No reproduction, language translation or distribution without written permission from TheWeekInCongress.com.(TM)