US Budget Deficit Narrows Slightly in February

The U.S. budget gap decreased 1 percent year-on-year to $192 billion in February of 2015, due to lower spending for refundable tax credits, interest on public debt and military activities.

February's budget results were affected by differences in the calendar. If adjusted for timing-related transactions, the budget deficit in February would have been $194 billion. Because March 1 fell on a weekend in 2014 and 2015, certain payments that ordinarily would have been made in March of both years were instead made in February. Similarly, because February 1 also fell on a weekend in both years, certain payments shifted to January. 

Receipts totaled $141 billion, $3 billion less than last year. Corporate income taxes declined by $10 billion, quite possibly reflecting the retroactive extension of tax provisions mentioned above. In addition, remittances to the Treasury from the Federal Reserve declined by $4 billion. Partially offsetting those changes, receipts from individual income taxes and payroll taxes together rose by $11 billion (or 9 percent), mainly because of increases in withheld taxes.

Spending was $333 billion, $5 billion less than a year earlier. Among the larger changes in outlays, compared with those of last year, were the following:
1.Spending for the government’s three largest entitlement programs increased by a total of $9 billion: Medicaid, by $3 billion (or 12 percent); Medicare, by $3 billion (or 8 percent); and Social Security, by $3 billion (or 5 percent).
2.Outlays for student loans were up by $5 billion, largely because in February 2014 the Department of Education recorded a reduction of $4 billion in the cost of existing student loans stemming from provisions in the Bipartisan Student Loan Certainty Act of 2013.
3.Subsidy payments for health insurance purchased through exchanges created under the Affordable Care Act increased by $2 billion.
4.Outlays for refundable tax credits were down by $16 billion (or 27 percent). Because the tax-filing season began earlier in 2015, on January 21 (as opposed to January 31 the year before), more of the outlays for those credits were in January and fewer were in February this year.
5.Outlays for interest on the public debt declined by $6 billion (or 31 percent) largely because adjustments to the principal of inflation-protected securities to account for inflation were an unusually large negative amount. (Those adjustments are based on the consumer price index for all urban consumers.)
6.Spending for military activities of the Department of Defense decreased by $3 billion (or 6 percent).

US Budget Deficit Narrows Slightly in February

Congressional Budget Office | Joana Taborda |
3/12/2015 6:24:16 PM