WASHINGTON – U.S. Treasury Secretary Jacob J. Lew
and Office of Management and Budget (OMB) Director Sylvia Mathews Burwell today
released details of the fiscal year (FY) 2013 final budget results, which show
continued and significant progress in reducing the deficit. The deficit in FY
2013 fell to $680 billion, $409 billion less than the FY 2012 deficit and $293 billion
less than forecast in President Obama’s April Budget. As a percent of Gross
Domestic Product (GDP), the deficit fell to 4.1 percent, representing a
reduction of more than half from the deficit that the Administration inherited
when the President took office in 2009. [1]
In his FY 2014
Budget, the President presented a plan that would make critical
investments to strengthen the middle class, create jobs, and grow the economy while
continuing to cut the deficit in a balanced way. Building on the $2.5 trillion in deficit
reduction already locked in, the President’s plan would replace the
economically damaging sequester while achieving additional deficit reduction to
put Federal debt on a downward path as a share of the economy. And unlike
sequestration, which includes no long-term deficit reduction, the President’s
plan includes structural reforms that would generate growing savings in the
second decade and beyond. Looking forward, the
Administration remains committed to working with Congress to enact proposals that
will both strengthen the economy and middle class by making needed investments
in education, infrastructure, research and development, and national security,
while putting debt as a share of the economy on a downward path.
“Under
President Obama, the nation’s deficit has fallen for the past four years, the
fastest pace of decline over a sustained period since World War II. It is now
less than half of what it was when the President took office,” said Treasury
Secretary Lew. “Congress must build on this progress by crafting a pro-jobs and
pro-growth budget agreement that strengthens the economy while maintaining
fiscal discipline.”
“We
must remain focused on measures that will support the middle class, strengthen
the economic recovery, promote the nation’s long-term competitiveness,
strengthen national security, and protect the least fortunate among us,” said
OMB Director Burwell. “The President’s Budget showed how we can do this while
at the same time improving our long-term fiscal outlook.”
Summary of Fiscal Year 2013 Budget Results
Year-end data
from the September 2013 Monthly
Treasury Statement of Receipts and Outlays of the United States Government
show that the deficit for FY 2013 was $680 billion. This represents a decrease
of $409 billion, or 38 percent, from last year. As a percentage of GDP, the
deficit fell to 4.1 percent, down from 6.8 percent in FY 2012.
The FY 2013
deficit of $680 billion was $293 billion or 30 percent less than the estimate
in the FY 2014 Budget, and $79 billion or 10 percent less than estimated in the
FY 2014 Mid-Session Review (MSR).
Table 1. Total Receipts, Outlays, and
Deficit (in billions of dollars)
|
|
Receipts
|
Outlays
|
Deficit
|
FY 2012 Actual
|
2,449
|
3,538
|
-1,089
|
Percentage of GDP
|
15.2%
|
22.0%
|
6.8%
|
FY 2013 Estimates:
|
2014 Budget
|
2,712
|
3,685
|
-973
|
2014
Mid-Session Review
|
2,777
|
3,536
|
-759
|
FY 2013 Actual
|
2,774
|
3,454
|
-680
|
Percentage of GDP
|
16.7%
|
20.8%
|
4.1%
|
The
significant decrease in the deficit from last year was due to a combination of
higher receipts and lower outlays in FY 2013.
Higher receipts accounted for 79 percent of the decline. Government
receipts totaled $2,774 billion in FY 2013. This was $325 billion higher than
in FY 2012, an increase of 13 percent. As
a percentage of GDP, receipts equaled 16.7 percent, 1.5 percentage points
higher than in FY 2012. FY 2013 receipts
were $62 billion higher than estimated in the FY 2014 Budget and $3 billion lower
than the estimate in the FY 2014 MSR. The
increase in receipts from FY 2012 can be attributed to a stronger economy and
the expiration of certain tax provisions. Higher wages and salaries made
collections of individual and payroll taxes strong throughout the year. The
expiration of the temporary cut in payroll taxes and the increase in tax rates
on income above certain thresholds enacted in the American Taxpayer Relief Act added
to collections. Corporation income tax collections were another contributor to
the increase in FY 2013. Additionally, collections increased for all other
major sources of receipts except for Federal Reserve deposits of earnings.
Outlays for FY
2013 were $3,454 billion, $84 billion below those in FY 2012, a 2 percent
decrease. As a percentage of GDP, outlays were 20.8 percent, 1.2 percentage
points down from last year’s 22.0 percent. The reduction in outlays can be
attributed to lower defense spending from the troop drawdown in Afghanistan,
lower spending on unemployment compensation due to lower unemployment rates, higher
dividend income from Fannie Mae and Freddie Mac, and spending cuts from
sequestration across numerous agencies. These decreases were partially offset
by increases in spending by the Departments of Agriculture and Health and Human
Services (Medicare and Medicaid), and the Social Security Administration.
Total Federal
borrowing from the public increased by $702 billion during FY 2013 to $11,982
billion, or 72.1 percent of GDP. The increase in borrowing included $680
billion in borrowing to finance the deficit, and $22 billion in borrowing
related to other transactions that affected the Government’s financing
requirements, such as disbursements for direct student loans and other Federal credit
programs. Total borrowing from the public net of financial assets and liabilities
increased by $680 billion during FY 2013 to $11,070 billion, or 66.6 percent of
GDP. (This measure of net borrowing, as reported in the Monthly Treasury
Statement, excludes the Federal Government’s holdings of Fannie Mae and Freddie
Mac preferred stock. If those stock holdings were included, net borrowing as a
percentage of GDP would be reduced by roughly one percentage point.)
Below are
explanations of the differences between estimates in the MSR and the year-end
actual amounts for receipts and agency outlays.
Fiscal Year 2013 Receipts
Total receipts
for FY 2013 were $2,774.0 billion, $2.6 billion lower than the MSR estimate of
$2,776.6 billion. This net decrease in receipts was attributable to
higher-than-estimated collections of individual income taxes and estate and
gift taxes, which were more than offset by lower-than-estimated collections of
other sources of receipts. Table 2 displays actual receipts and estimates from
the Budget and the MSR by source.
- Individual income taxes were
$1,316.4 billion, $6.7 billion higher than the MSR estimate. Withheld and
nonwithheld payments of individual income tax liability were $3.8 billion
and $4.2 billion higher than the MSR estimate, respectively. These
increases were partially offset by higher-than-expected refunds of $1.3
billion.
- Corporation income taxes were $273.5
billion, $5.2 billion lower than the MSR estimate. This difference
reflected lower-than-expected payments of 2013 corporation income tax
liability of $5.1 billion.
- Social insurance and retirement
receipts
were $947.8 billion, $3.5 billion lower than the MSR estimate. This
reduction was primarily attributable to lower-than-estimated deposits by
States to the unemployment insurance trust fund of $1.7 billion. Reductions in other sources of social
insurance and retirement receipts—primarily Social Security and Medicare
payroll taxes—accounted for the remaining reduction in this source of
receipts relative to the MSR estimate.
- Excise taxes were $84.0
billion, $1.3 billion below the MSR estimate.
- Estate and gift taxes were $18.9
billion, $1.2 billion greater than the MSR estimate.
- Customs duties were $31.8
billion, $0.3 billion below the MSR estimate.
- Miscellaneous receipts were $101.5
billion, $0.2 billion below the MSR estimate. Lower-than-expected deposits of earnings
by the Federal Reserve System of $2.2 billion were offset by
higher-than-anticipated collections of other miscellaneous receipts.
Fiscal Year 2013 Outlays
Total outlays
were $3,454.3 billion for FY 2013, $81.6 billion below the MSR estimate. Table
3 displays actual outlays by agency and major program as well as estimates from
the Budget and the MSR. The largest changes in outlays from the MSR were in the
following areas:
- Department
of Agriculture
— Outlays for the Department of Agriculture were $155.9 billion, $3.7
billion lower than the MSR estimate.
o
Supplemental
Nutrition Assistance Program (SNAP) outlays were $1.6 billion lower than estimated
in the MSR as a result of slightly lower September participation than expected,
lower-than-expected per person benefits, and lower-than-expected needs for disaster
assistance. Similarly, outlays in the
Child Nutrition National School Lunch Program were $1.2 billion lower than estimated
due to lower meal service participation, particularly in the "Paid"
or full-price meal category.
o
Outlays
for the Pigford discriminations claims settlement were $1.1 billion greater
than anticipated, because the MSR anticipated claims would be paid in October
2013 (FY 2014), but the claims were paid in September 2013 (FY 2013).
o
Net
outlays for the Risk Management Agency's Federal Crop Insurance Fund were $0.8
billion lower than the MSR estimate. The 2008 Farm Bill changed the due date for
farmers’ premium payments from October to September, effective as of September
2013. The MSR overestimated the number of farmers who would pay late on the
first year of the change, causing offsetting collections to be understated.
o
Net
outlays for the Rural Utilities Service were $0.8 billion higher than the MSR
estimate. The difference was due almost entirely to changes in the cushion of
credit and the difficulty in predicting the rates at which borrowers elect to
repay their loans using cushion of credit funds.
o
Outlays
for the Commodity Credit Corporation were $0.3 billion less than anticipated,
because commodity prices were slightly higher than anticipated. Higher commodity prices also reduced outlays for
Funds for Strengthening Markets, Income, and Supply (section 32) by $0.2
billion by reducing the need for Government purchases.
- Department
of Defense
— Outlays for the Department of Defense were $607.8 billion, $2.5 billion
lower than the MSR estimate. Most of this difference was due to
lower-than-expected outlays in operation and maintenance accounts over the
second half of the fiscal year, as actions the Department took to
accommodate sequestration reductions generated outlay savings more quickly
than projected. These lower-than-expected outlays were partially offset by
higher-than-expected outlays for procurement and for research,
development, test, and evaluation programs.
- Department
of Education
— Outlays for the Department of Education were $40.9 billion, $3.5 billion
lower than the MSR estimate. The difference was primarily driven by the collection
of $2.3 billion more in negative subsidies in the Federal Direct Student
Loan Program than estimated in the MSR, the result of changes to student
loan interest rates enacted in the Bipartisan Student Loan Certainty Act
of 2013, which the President signed into law on August 9. Inaction on the Administration’s
proposal to provide funding for teacher jobs reduced outlays by a further
$0.4 billion relative to the MSR.
- Department
of Health and Human Services — Outlays for the Department of
Health and Human Services were $886.3 billion, $17.7 billion lower than
the MSR estimate. Outlays for Medicaid were $8.7 billion lower than the
MSR estimate, accounting for about half the difference in the agency as a
whole. The difference was primarily the result of lower-than-anticipated
benefits spending during the second half of the year. Additionally,
refunds to the Medicare program were $5.7 billion (55.4 percent) higher
than the MSR estimate, contributing to lower net outlays. This was partially offset by lower
Medicare Part B premium receipts of $1.0 billion (1.6 percent), which increased
net outlays relative to the MSR estimate.
- Department
of Labor
— Outlays for the Department of Labor were $80.3 billion, $5.9 billion
lower than the MSR estimate. The
largest single factor in the reduction in outlays relative to the MSR was
Unemployment Insurance (UI) benefits. Most of the difference was due to
lower spending in the regular UI and Emergency Unemployment Compensation
programs as the number of weeks claimed declined below forecasted levels.
In addition, the MSR estimate reflected outlays for several legislative
proposals that were not enacted, including $0.8 billion in outlays for two
of the Administration's jobs proposals (the Pathways Back to Work Fund and
Reemployment NOW) and $0.6 billion for a proposal to strengthen UI
solvency. Lastly, the MSR overestimated net outlays for the Federal
Employees' Compensation Act program by $0.5 billion.
- Department
of State
— Outlays for the Department of State were $25.9 billion, $3.6 billion
lower than the MSR estimate. Outlays were lower than expected for
Department of State foreign assistance programs including International
Narcotics Control and Law Enforcement, Migration and Refugee Assistance,
and Global Health Programs. Outlays for these accounts were $2.0 billion
in total below the MSR estimate. The late enactment of appropriations and
delays in the allocation and execution process for foreign assistance
funding, including Congressional notification requirements, contributed to
slower-than-expected outlays for these programs. Lower-than-expected
outlays for capital intensive programs such as new overseas facility
construction and delayed payments for contributions to international
organizations and peacekeeping were primarily responsible for the
remaining outlay difference of $1.6 billion.
- Department
of Transportation — Outlays for the Department of Transportation
were $76.3 billion, $2.2 billion lower than the MSR estimate. The lower
actual 2013 outlays were due to several factors. Obligations and outlays
for the Federal Transit Administration were lower than anticipated in the
MSR, as grantees adjusted to revised regulations and other guidance
promulgated following enactment of a new surface transportation
authorization bill, Moving Ahead for Progress in the 21st
Century (MAP-21) in July 2012, just three months before the start of
fiscal year 2013. The delayed enactment of 2013 appropriations also slowed
outlay rates for transit capital programs relative to MSR estimates as
some grantees were cautious with capital spending under a continuing
resolution. Within the Federal Aviation Administration, Airport
Improvement Program grants were obligated (and outlayed) more slowly than
anticipated due to the later enactment of the 2013 full-year appropriation.
- Department
of the Treasury
— Outlays for the Department of the Treasury were $399.1 billion, $4.9
billion lower than the MSR estimate.
o
Net
outlays for intragovernmental interest transactions with credit financing
accounts were $7.5 billion higher than projected, including $3.6 billion
lower-than-projected interest paid to credit financing accounts and $11.1
billion lower-than-anticipated receipts of interest from credit financing
accounts. (Interest received from credit financing accounts is reported in
Treasury's aggregate offsetting receipts.)
o
Outlays
for the Troubled Asset Relief Program (TARP) were $2.5 billion below the MSR
estimate, due almost entirely to lower outlays under TARP housing programs,
including TARP support for FHA programs.
o
Outlays
for Treasury's Grants in Lieu of Tax Credits for Specified Energy Property
program were $1.0 billion less than expected.
This program makes payments when renewable energy facilities are
certified as being operational (i.e., placed in service and producing energy).
The timing of placed in service dates is highly uncertain and actual completion
of these investment projects was slower than assumed in the MSR.
- Office
of Personnel Management — Outlays for the Office of
Personnel Management were $83.9 billion, $5.6 billion lower than the MSR
estimate. This difference was primarily attributable to Congressional
inaction on the legislative proposal to reform the United States Postal
Service (USPS). $2.6 billion of the $5.6 billion difference was due to the
reform’s proposed payment from the Civil Service Retirement and Disability
Fund to refund excess Federal Employees Retirement System contributions to
USPS. The proposal also contained a provision requiring the Postal Service
Retiree Health Benefit Fund to outlay the government share of annuitant
health insurance premiums to former postal employees. These outlays would
have totaled $2.9 billion.
- Federal
Deposit Insurance Corporation — Outlays for the Federal Deposit
Insurance Corporation were $1.1 billion, $8.0 billion lower than the MSR
estimate. The difference was primarily attributable to lower-than-expected
payments related to FDIC's resolution of failed insured depository
institutions through its Deposit Insurance Fund, which was partially a
result of improved capital positions in the banking sector.
- Undistributed
Offsetting Receipts — Undistributed offsetting receipts were
$249.5 billion, $2.1 billion higher than the MSR estimate. Receipts for
employer share, employee retirement were $81.3 billion, $4.3 billion higher
than MSR estimates. This difference was largely due to Congressional
inaction on the MSR proposal for Postal reform, which provided for a $3.3
billion receipt in FY 2013 into the employer share accounts.
- Allowances — The MSR
included $14.3 billion in outlays for allowances, virtually all of which
represented the effects of the Administration’s proposal to reverse the
2013 sequestration imposed due to the failure of the Joint Select
Committee on Deficit Reduction.
Inaction on the proposal to reverse sequestration reduced outlays
by $14.0 billion relative to the MSR estimates.
###
2013 Budget Receipts by Source (table 2) and the 2013 Budget Outlays by Agency (table 3)