July 2015 Treasury Deficit

America’s budget deficit increased in July according to the Treasury Department.  During the period, the nation’s outlays outpaced income to the tune of $149.0 billion.  This follows June’s shortfall of $51.0 billion.  On a year-to-date basis, the 2015 deficit is slightly worse than this time last year (-$465.5 billion vs. -460.5 billion in 2014).

Budget receipts fell versus a month ago but were higher on a year-to-date basis comparted to the same period a year earlier.  Total receipts dropped $117.4 billion to $225.5 billion in July.  Over one-third of the drop in receipts was due to a slowdown in the amount of individual taxes collected.  Over half of the change was due to a large decrease in corporate taxes paid ($10.6 billion in July vs $72.8 billion in June).   Nevertheless, year-to-date, receipts are up 11.6 percent to $1.28 trillion.

Outlays jumped 28.7 percent during the month; however, the calendar made a substantial impact on the total.  Military active and retirement payments along with Veteran’s benefits, Supplemental Security Income, and Medicare payments to HMO’s and prescription drug plans were accelerated into July since August 1, 2015, the normal payment date, fell on a non-business day.  This will help the August tally when it is released next month.

This indicator is improving but unless the beltway gets into gear, it will not continue getting better.  After 2018, less than2.5 years from now, the deficit is projected to accelerate according to the Congressional Budget Office.  Our economy has been slow growing since the end of the last recession, and will need some action from the nation’s capital to prevent the debt-to-GDP ratio from accelerating to an untenable level.              (by C. Cox)