Fiscal 2019 Deficit by Month

Below is a chart comparing the monthly deficit or surplus of the United States with the prior fiscal year (October 1 through September 30). During Fiscal 2019, the federal government overspent by $984 billion, which is $205 billion more than the $779 deficit for Fiscal 2018.

As a percentage, the U.S. deficit rose by a whopping 26.3%. Fiscal 2019 receipts increased by 4%, but spending increased by twice as much. You don’t have to be a financial wizard to recognize there is a problem when spending is increasing at twice the rate of revenues. This trend is not sustainable.

Does it alarm you the federal government overspent by nearly $1 trillion last year, and that spending is growing twice as fast as revenues?

Fiscal 2019 Deficit Through June

Below is a chart comparing the monthly deficit or surplus for Fiscal 2019 in comparison with Fiscal 2018. Through the first nine months of this fiscal year, the U.S. government overspent by $746 billion, which is $139 billion more than last fiscal year.

The deficit for July was only $9 billion. This primarily due to $50 billion of July expenditures which were paid in June, since July 1 fell on a Saturday.

Government receipts were up by 3 percent for the first nine months of Fiscal 2019. However, expenditures were up by 7 percent. With this 4 percent spread, it’s easy to see why the deficit has grown by another $139 billion this year.

How sustainable do you think it is for expenditures increase by more than double the rate of revenues?

Fiscal 2018 Deficit Through April

The graph below illustrates the monthly deficit or surplus for Fiscal 2018. 

The cumulative deficit through the end of April is $382 billion, which is $39 billion more than last fiscal year. The large surplus in April is primarily due to the payment of individual taxes that were due April 15th. Based on current projections, the federal government won't have another surplus month this fiscal year and the deficit will more than double over the next five months.

What are your thoughts about the Fiscal 2018 deficit?

The Deficit for Fiscal 2017

The Congressional Budget Office (CBO) has finished accounting for the country's finances for Fiscal Year 2017, which ended September 30, 2017. The deficit for the year was $666 billion, and the chart below shows the budget surplus or deficit by month. 

The following are a few highlights.
▪️The deficit was $80 billion more than Fiscal 2016.
▪️Since the CBO initially projected the deficit would be less than 2016, the federal government spent over $100 billion more than initially planned.
▪️Revenues were $3.3 trillion: 1% more than Fiscal 2016.
▪️Expenditures were $4.0 trillion: 3% more than Fiscal 2016.

What do you think about the country's financial results for the past year?

The Fiscal 2017 Deficit

The U.S. government's fiscal year ended on September 30, and a new year began on October 1. The Congressional Budget Office (CBO) estimates the Fiscal 2017 deficit was $668 billion, which is $81 billion more than Fiscal 2016. A year ago, the CBO was projecting the Fiscal 2017 deficit would be less than Fiscal 2016, not $81 billion more. The chart below compares the monthly deficit or surplus to the prior year.

Total government revenues increased by 1%, but expenditures increased by nearly 3%. As a percentage of Gross Domestic Product (GDP), the Fiscal 2017 deficit was approximately 3.5% of GDP, up from 3.2% in Fiscal 2016. It's also the second consecutive year the deficit rose as a percentage of GDP, which indicates government spending is growing faster than the U.S. economy.

We're already two weeks into the new fiscal year, and Congress is still a long ways from deciding on government spending for the coming year. To prevent a government shutdown, Congress approved a Continuing Resolution, that effectively continues all Fiscal 2017 spending until mid-December. Since it's unlikely Congress will enact the necessary monetary legislation until close to the deadline, spending for nearly one-fourth of the year will be equal to or greater than last year. Unless Congress enacts spending cuts (which it has been unable to do so far), they have created a situation where the Fiscal 2018 deficit will likely be higher than the most recent $668 billion deficit.

Are you concerned the federal government spent $668 billion more than it received during the last year?

The U.S. Deficit for Fiscal 2017 Through July

The graph below tracks the deficit of the U.S. government for this fiscal year, which ends September 30, in comparison to the monthly deficit for Fiscal 2016. For the first 10 months of the year, the cumulative deficit is $568 billion; $54 billion more than last fiscal year. 

Since July 1, 2017 fell on a Saturday, the federal government made a number of payments in June, that would traditionally be recorded in July. As a result of this timing difference, the June 2017 deficit was much larger, and the July 2017 deficit was less. When combined, the June and July 2017 monthly deficits are $30 billion more than the same two months of 2016.

The deficit for all of Fiscal 2016 was $587 billion. Since the federal government has already overspent by $568 billion for the first 10 months of this fiscal year, it's all but certain the Fiscal 2017 deficit will be higher than Fiscal 2016. This is significant because the deficit was initially projected to decline in Fiscal 2017 and Fiscal 2018, before starting a rapid increase in Fiscal 2019. Since the current year deficit will be higher than last year, the cycle of ever increasing deficits may have already started and will continue indefinitely unless Congress does something to move towards a balanced budget.

What's your reaction to the latest budget deficit numbers?

The Fiscal 2017 Deficit Through June

The chart below tracks the monthly surplus or deficit recorded by the U.S. government for Fiscal 2017, which ends on September 30, 2017.

The deficit for June 2017 was $93 billion higher than June 2016. Since July 1st fell on Saturday, certain payments that would typically have occurred in July were paid in June. This accounted for $44 billion of additional June spending. Excluding the timing difference, the June deficit was $49 billion more than June 2017.

Overall, revenues for the first nine months of Fiscal 2017 were 2% more than Fiscal 2016, but total spending increased by 6%. This mismatch of spending growth in excess of revenue growth is fueling a larger deficit. Although the Congressional Budget Office (CBO) initially projected the Fiscal 2017 deficit would be less than Fiscal 2016, the CBO now expects the current deficit will be $109 billion more than last year.

Are you concerned that spending is increasing by 6% while revenues are increasing by 2%?

The Budget Process-As It's Supposed to Work

Congress has established a process for how the budget process is supposed to work. However, this process has not been followed for years.

Below is a quick synopsis of the process.

• The President delivers his proposed budget between the last Monday in January and the first Monday in February.
• The Congressional Budget Office (CBO) scores the President's proposed, which estimates the projected revenues and expenditures and the CBO results are compared to the estimates prepared by the Office of Management and Budget (OMB)
• The House and Senate pass a Budget Resolution outlining the revenue and spending priorities of Congress. As a Congressional Resolution,  the President does not sign the Budget Resolution.
• Congress passes 12 separate Appropriations Bills authorizing the specific spending by the various Departments and Agencies of the U.S. government.

The last time Congress passed all 12 appropriations bills on time was in 1994. For the last 20+ years, they have consistently used omnibus spending bills and continuing resolutions, where they combine more than one appropriations bills (or all of them), into one piece of must-pass legislation, to fund the government. 

Is it possible there is a correlation between the departure from the established budget process and the increase in annual budget deficits?

The next post will provide a status overview of the Fiscal 2017 budget and appropriations bills.