from the Congressional Budget Office
The federal budget deficit was $782 billion in fiscal year 2018, the Congressional Budget Office estimates, $116 billion more than the shortfall recorded in fiscal year 2017. As was the case last year, this year’s outlays were affected by shifts in the timing of certain payments that otherwise would have been due on a weekend. If not for those shifts, the deficit for the year would have been $826 billion – $162 billion larger than last year’s amount.
The 2018 deficit equaled an estimated 3.9 percent of gross domestic product (GDP), up from 3.5 percent in 2017. (If not for the timing shifts, the 2018 deficit would have equaled 4.1 percent of GDP.) Fiscal year 2018 was the third consecutive year in which the deficit increased as a percentage of GDP.
By CBO’s estimate, revenues were about the same and outlays were about 3 percent higher in 2018 than they were in the previous fiscal year. CBO’s estimates are based on data from the Daily Treasury Statements issued by the Department of the Treasury; the department will report the actual deficit for fiscal year 2018 later this month.
A deficit of $782 billion would be about $11 billion smaller than the shortfall that CBO projected in its May 2018 report, An Analysis of the President’s 2019 Budget. Revenues and outlays were less than CBO anticipated, but outlays were lower by a larger amount.
Total Receipts: Up by Less Than 1 Percent in Fiscal Year 2018
Receipts totaled $3,328 billion in fiscal year 2018, CBO estimates—$13 billion more than in fiscal year 2017. That small net increase reflects the following changes:
- Amounts withheld from workers’ paychecks rose by $23 billion (or 1 percent). That change largely reflects increases in wages and salaries that were partly offset beginning in February by a decline in the share of income withheld for taxes. In January, the Internal Revenue Service issued new withholding tables to reflect changes made by last year’s major tax legislation (Public Law 115-97) that took effect at the beginning of the current calendar year. All employers were required to begin using the new tables by February 15, 2018.
- Nonwithheld payments of income and payroll taxes rose by $89 billion (or 15 percent). Most of that increase occurred in April, when taxpayers made their final payments of taxes for 2017.
- Individual income tax refunds rose by $7 billion (or 3 percent), reducing net receipts.
