Friday, February 07, 2014

CBO: Federal Deficit at $10 Billion in January

by Calculated Risk on 2/07/2014 06:39:00 PM

From the Congressional Budget Office (CBO): Monthly Budget Review for January 2013

The federal government ran a budget deficit of $184 billion for the first four months of fiscal year 2014, CBO estimates—$107 billion less than the shortfall recorded in the same span last year. Revenues are higher and outlays are lower than they were at this time a year ago. Without shifts in the timing of certain payments (which otherwise would have fallen on a weekend), the deficit for the four-month period would have been $141 billion less this year than it was in fiscal year 2013. If lawmakers enact no further legislation affecting spending or revenues, the federal government will end fiscal year 2014 with a deficit of $514 billion, or 3.0 percent of gross domestic product (GDP), CBO estimates. That figure compares with a deficit of $680 billion, or 4.1 percent of GDP, in 2013. (For more details about CBO’s most recent budget projections, see The Budget and Economic Outlook: 2014 to 2024.)
And for January 2014:
The federal government incurred a deficit of $10 billion in January 2014, CBO estimates—a $13 billion difference from the $3 billion surplus realized in January 2013. Because February 1 fell on a weekend in 2014, and January 1 is a holiday, certain payments that ordinarily would have been made in February this year were instead made in January, and certain payments that would ordinarily be made in January were made in December in both 2012 and 2013. Without those shifts in the timing of payments, the federal government would have realized an $8 billion surplus in January 2014 and a $15 billion deficit in January 2013—a $23 billion difference.
emphasis added
After accounting for timing, that is a significant reduction in the deficit in January.  My guess is the deficit for fiscal 2014 will be smaller than the CBO currently expects (less than 3.0% of GDP).