The U.S. budget deficit is a narrower $493.95 billion for the first 5 months of the year versus $580.82 billion for the same 5-month period a year ago. The news sequestration and the resolution to the fiscal cliff may have helped in this matter, although it seems that higher tax revenues are unlikely to bring Democrats and Republicans any closer together. Tax receipts are up 13% so far to $1.01 trillion.
February's budget deficit was $203.54 billion versus almost $231.7 billion for the same month a year ago. Bloomberg was calling for a deficit of some $205 billion. Should we bother mentioning that this year's February had one day less in it? Federal spending was up 2% to $1.505 trillion. So what you are seeing is slower spending growth, but not slower spending.
It is hard to celebrate close to $100 billion less when you consider that the run rate on a straight-line is still in the range of close to a $1.2 trillion deficit even if recent projections from the CBO appear to finally be under $1 trillion (almost $850 billion). As per the "straight-line" estimate, that is if the rates were averaged from the first five months and annualized on a static 12-month basis.
Today's report is on the heels of a Republican budget proposal aiming at $4.6 trillion in spending cuts along with a tax code revision. Democrats seem very unlikely to jump on board. We are still of course awaiting a White House budget proposal and the nation has now operated for four years without a budget.
By the way, we have still been given no explanation from the great profitable and "independent" U.S. Postal Service how they added some 4,500 workers to their payrolls in February.
Filed under: 24/7 Wall St. Wire, Economy, Politics Tagged: featured