The federal government ran a budget deficit of $489 billion in the first seven months of fiscal year 2013 (that is, from October 2012 through April 2013), according to CBO’s estimates. That amount is $231 billion less than the shortfall recorded during the same period last year, primarily because revenue collections have been much greater than they were at this point in 2012. In contrast, federal spending so far this year has been slightly lower than what it was last year at this time.
Receipts for the first seven months of fiscal year 2013 totaled $1,603 billion—$220 billion more than the amounts taken in over the same period last year, CBO estimates.
Compared with receipts in the first seven months of last year:
Taxes withheld from workers' paychecks rose by $99 billion (or 9 percent), mainly because of higher wages and salaries, the expiration of the payroll tax cut in January 2013, and increases (beginning in January) in tax rates on income above certain thresholds.
Nonwithheld receipts rose by $80 billion (or 30 percent), primarily because of higher payments made during the tax-filing season (February through April). Those payments—largely representing final payments for the 2012 tax year—increased by $66 billion (or 36 percent). Income tax refunds declined by $6 billion, further boosting receipts. The large increase in payments accompanying people’s income tax returns probably reflects the fact that higher-income taxpayers, anticipating changes in tax law, realized more income in 2012.
Those final payments submitted with 2012 tax returns (net of refunds) were substantially greater than the amounts CBO projected in its February 2013 report The Budget and Economic Outlook: Fiscal Years 2013 to 2023. The agency will issue updated budget projections for the 2013–2023 period next week.
Outlays for the first seven months of fiscal year 2013 were $41 billion less than the federal government spent during the same period last year, after adjusting for shifts in the timing of certain payments. Those shifts occurred primarily because October 1, 2011, fell on a weekend, and certain payments scheduled for that date were instead made in September, moving outlays from fiscal year 2012 into fiscal year 2011. The year-over-year changes shown in the table and discussed below reflect adjustments to account for those timing shifts.
Some of the decline in spending from 2012 to 2013 stems from changes to the estimated cost of past transactions of several credit programs (notably for TARP, the Troubled Asset Relief Program). With those changes excluded and with adjustments for the timing shifts, the difference would have been smaller—about 0.5 percent.
Outlays for some major programs or categories of spending were less than what was spent in the first seven months of last year:
In contrast, for some major programs and activities, spending increased:
The Treasury realized a surplus of $112 billion in April 2013, CBO estimates—$52 billion more than the surplus reported for April 2012. But that comparison is distorted by quirks of the calendar: Because April 1, 2012, fell on a Sunday, certain payments that ordinarily would have been made at the beginning of that month were instead made in March. As a result, outlays for April 2012 were reduced by about $31 billion. Without that shift in the timing of payments, the surplus in that month would have been smaller, and the surplus recorded in April 2013 would have been $83 billion higher than that in April 2012.
Historically, the federal budget usually shows a surplus in April because of the substantial income tax payments that are made in that month. Nevertheless, the surpluses recorded in April 2012 and 2013 were the first seen in that month since 2008, when the surplus was $159 billion.
The surplus rose because revenues in April this year were much greater than those last April, whereas outlays increased only slightly (after adjusting for the timing shifts). CBO estimates that receipts in April totaled $407 billion—$88 billion (or 28 percent) more than those in the same month last year. Compared with receipts in April of last year:
Nonwithheld taxes—largely representing final payments for the 2012 tax year—rose by $66 billion (or 40 percent). Refunds of individual income taxes rose by $5 billion, partly offsetting that increase.
Withheld taxes rose by $15 billion (or 10 percent), reflecting the expiration of the payroll tax cut in January 2013, along with other tax increases and higher wages and salaries.
Outlays in April of this year totaled $295 billion, CBO estimates—$35 billion more than spending in April of last year. However, outlays would have been only $5 billion higher than they were during April 2012 if not for the effects of timing shifts (see above table). Among the larger changes in outlays compared with last year:
The Treasury Department reported a deficit of $107 billion for March, the same amount that CBO estimated on the basis of the Daily Treasury Statements.
This document was prepared by Elizabeth Cove Delisle, Barbara Edwards, David Rafferty, Dawn Sauter Regan, and Joshua Shakin.
The amounts shown in this report include the surplus or deficit in the Social Security trust funds and the net cash flow of the Postal Service, which are off-budget. Numbers may not add up to totals because of rounding.