Federal Deficit News Better Than Expected

The Federal Budget deficit was actually better than expected based on estimates done in May and August. The government’s fiscal year ended on September 30. The Treasury and OMB said the decline in the deficit from the August Mid-Session Review estimate reflected outlays that were $132 billion lower than expected in August, in large measure because of lower-than-anticipated outlays by the government’s TARP. The decline was also the result of receipts that were $31 billion higher than estimated in the Mid-Session Review. The final $1,417 billion FY2009 deficit figure was $424 billion lower than projected in the FY2010 Budget, released in May,

Government receipts in FY2009 were $419 billion lower than in FY2008 — a reduction of 16.6 percent.  This was largely a result of the effects of the economic slowdown on incomes and corporate profits and the tax provisions in the Recovery Act, enacted in February 2009. Primarily because of the government’s economic recovery efforts, outlays for FY2009 grew by $543 billion, or 18.2 percent, from FY2008. 

Source: U.S. Treasury Secretary Tim Geithner and White House Office of Management and Budget (OMB) Director Peter R. Orszag  details of the final Fiscal Year 2009 budget results. 

Douglas A. McIntyre