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November U.S. budget deficit drops to $56.8 billion

Martin Crutsinger Associated Press

WASHINGTON – The federal government’s deficit for the first two months of the new budget year is down 21 percent from the same period a year ago, although much of that improvement stems from quirks in the calendar.

The Treasury Department said Wednesday the deficit for November totaled $56.8 billion, a drop of 58 percent from last year’s November deficit of $135.2 billion. For the first two months of the budget year that began Oct. 1, the deficit totals $178.5 billion, an improvement of 21 percent from the same period last year.

However, the calendar heavily influenced the changes by shifting payment dates for various government benefits. Adjusting for those changes, Treasury says the deficit this year is still 6.8 percent lower than last year.

In October and November, tax receipts totaled $404.2 billion, 6 percent more than a year ago. Outlays totaled $582.7 billion for the two months, 4 percent below the same period a year ago.

The CBO is forecasting that the deficit for the 2015 budget year, which runs through next September, will fall to $469 billion from $483.3 billion in 2014. That would be an improvement of 3 percent for the full year.

Congress came back after the November elections facing the task of passing a budget for the current budget year. Negotiators reached agreement on a $1.1 trillion spending package, but the measure remains contentious. The House is scheduled to vote on the proposal today.

After this year, the CBO is forecasting that deficits will resume rising for the rest of the decade as baby boomers retire and Social Security and Medicare costs rise. The CBO and other budget experts have warned that the current trajectory for the deficit is unsustainable and eventually could lead to a fiscal crisis.

The $483 billion deficit for 2014 was the smallest since George W. Bush’s last full year as president. When measured against the size of the economy, the deficit equaled 2.8 percent of gross domestic product, below the average for the last four decades. By comparison, the deficit for 2013 was $680 billion, or 4.1 percent of GDP.