Federal Government Recorded Budget Deficit Of $871 Billion For First Seven Months Of Fiscal Year

The federal government recorded a budget deficit of $871 billion for the first seven months of fiscal year (FY) 2011, according to estimates by the Congressional Budget Office (CBO) that were released on May 6 in its Monthly Budget Review. This is $70 billion more than the deficit recorded for the similar period in FY 2010. Revenues are running 9% higher than they were last year. In April, non-withheld receipts of income and payroll taxes, mostly from filings of income tax returns for tax year 2010, grew by $35 billion (or 27%) “to their highest level for the month of April since 2008,” CBO said. Refunds paid as a result of filings of returns declined by $5 billion. So far in FY 2011, individual income tax receipts are $130 billion (or 26%) more than in the corresponding period last year. This was attributed to “increased amounts withheld from paychecks and strong growth in payments accompanying 2010 tax returns.” Corporate tax receipts are up by $3 billion. Receipts from social insurance taxes fell by $31 billion (or 6%) due to the temporary reduction in payroll taxes that became effective in January. Total receipts from estate and gift taxes declined by $6 billion. Of particular note, final payments with 2010 tax returns net of refunds increased more than CBO had expected. This suggests several possibilities, CBO said, including: certain types of income may have grown faster in 2010 than expected; income growth may have been more concentrated than expected among taxpayers subject to relatively high tax rates; and the impact of changes in tax law may be different from what was projected. The budget review is available at http://www.cbo.gov/ftpdocs/121xx/doc12172/2011_04_MBR.pdf.