CBO released its Monthly Budget Review today. During the first two months of fiscal year 2008, the budget deficit was $157 billion, according to our estimates -- $35 billion higher than the same period last year. Timing shifts and a difference in the number of business days account for roughly half of the increase in the deficit relative to last year. After adjusting for those differences, we estimate that the increase in the deficit amounts to about $16 billion.
Trends in corporate revenue may be of particular interest because much of the improvement in the budget deficit over the past several years can be attributed to a substantial rise in corporate income tax revenue. The report notes that although the amounts collected thus far are small and may not provide much insight into the receipts to be collected during the full fiscal year, net corporate income tax receipts declined by 35 percent ($5 billion) during the first two months of this fiscal year, compared with receipts in the same months last year. Corporate receipts have fallen in each of the past five months compared with the same months in fiscal year 2006. The first substantial payment of corporate taxes for this fiscal year is due to the IRS by December 17, and more information about trends in corporate income tax revenue will be available shortly thereafter.
The Monthly Budget Review was prepared by Mark Booth and Barbara Edwards of our Tax Analysis Division and Chad Chirico and Kathy Gramp of our Budget Analysis Division.