CBO Monthly Budget Review, November 2010
by Gary Therkildsen*, 12/9/2010
On Monday, the Congressional Budget Office (CBO) released its Monthly Budget Review (MBR) for November. Two months into fiscal year (FY) 2011 and the federal government is $283 billion in the hole. The good news is that this deficit is $14 billion less than the shortfall the government experienced at this time last year. The continuing bad news is that budget deficits like this are going to continue well into the future. Oh, and according to the report, the economy is "strengthening," which is also good news.
Over all, revenues are up a little – $25 billion more than this time last year – and outlays are up a bit as well – $11 billion more than in the same period last year. So what accounts for these changes? Well, a couple things explain the changes.
First, on the revenue side, the government, according to the CBO's blog, took in more "withheld income and social insurance (payroll) taxes" during the first two months compared to FY 2010, which reflects "strengthening economic conditions." Withholdings dominate the government's revenue stream at this point in the fiscal year because few corporations or individuals are making income tax payments to the feds.
Second, on the expenditure side, higher defense costs – driven by procurement spending and operations and maintenance costs – drove much of the increase. The rest was a result of increased net interest on the public debt, which grew by $3 billion, or roughly 8 percent. This increase resulted from the sizable borrowing Uncle Sam did during the last fiscal year.
Anyways, like most of the MBRs during the past ten years, all MBRs for the near future are going to look like this because no one on Capitol Hill really cares about deficits. But, hey, at least the CBO sees economic conditions getting better. Read the rest of the CBO report to soak up all the estimates, budget totals, and receipts and outlays you can get your hands on.
Image by Flickr user johnsolid used under a Creative Commons license.