Federal Deficit Improves in July on Higher Tax Collections

The Federal Deficit narrowed in July due to higher tax receipts.  The deficit for October through July was $973.84 billion and that compares with $1.1 trillion for the same ten month period of 2011.

The monthly report shows that the federal government has spent some $2.983 trillion so far this year and that is barely down from the $2.993 trillion seen for the same period a year ago.  Tax collections year to date have been $2.009 trillion and that is 6% higher than the $1.893 trillion for the same ten month period last year.

Without education and TARP adjustments, that deficit would have apparently been $1.026 trillion versus $1.185 trillion a year ago. That puts the unadjusted figures at a deficit of $69.6 billion in July versus a $129.38 billion in the month of July of 2011.

Individual income tax receipts for the first ten months of Fiscal 2012 rose to $928.17 billion from $890.65 billion in 2011. Corporate taxes rose $182.44 billion from $140.54 billion in the same period in 2011.

We have already seen that the CBO is projecting that the 2012 deficit will be about $1.2 trillion.

JON C. OGG