The federal government’s fiscal year 2012 has come to a close, and CBO estimates—in its latest Monthly Budget Review—that the federal budget deficit for the year was about $1.1 trillion, or 7.0 percent of gross domestic product (GDP). Although the deficit is approximately $200 billion lower than the shortfall recorded in 2011, fiscal year 2012 marks the fourth year in a row with a deficit of more than $1 trillion. As a share of economic output, the deficit has fallen in recent years—from 10.1 percent of GDP in 2009 to 9.0 percent in 2010 and 8.7 percent in 2011.
The decline in the deficit stems largely from an increase in revenues. Revenues were about 6 percent higher in fiscal year 2012, driven in part by a significant influx of corporate income tax receipts. Outlays were about 2 percent lower than they were last year.
Today’s estimate of the deficit is $38 billion below what CBO projected in its August Budget and Economic Outlook because revenues were higher and outlays were lower than expected for the last two months of the fiscal year. CBO’s deficit estimate is based on data from the Daily Treasury Statements; the Treasury Department will report the actual deficit for fiscal year 2012 later this month.
The Monthly Budget Review was prepared by Elizabeth Cove Delisle, Barbara Edwards, David Rafferty, Dawn Sauter Regan, and Joshua Shakin.