April 2018 Federal Deficit

As far as monthly budget surpluses go, April 2018 was a record for America.  Federal receipts were $214.3 billion more than outlays in the period.  Of course, most Americans filed income taxes during the month, so it wasn’t a complete surprise that the nation remained in the black.  Our government collected $510.4 billion, 12.0 percent more than a year earlier, pushing the monthly surplus to the best ever.

Despite the record-setting month, our nation’s deficit is worse on a year-to-date basis.  Versus the same period last year, our nation’s shortfall rose11.9 percent.  Receipts and outlays are both higher this year.  Revenues have grown 4.1 percent to $2.007 trillion compared to the first seven months of the fiscal year 2017; individual income taxes are up 26.1 percent, symptomatic of an improving economy.  Meanwhile, corporate taxes have fallen 29.4 percent.  On the other side of the ledger, spending has increased 5.3 percent thus far in fiscal 2018, reaching $2.393 trillion.

While April has set the record for surpluses, it needed help from the calendar.  Roughly $45 billion in outlays for Military active duty and retirement, Veteran’s benefits, Supplemental Security Income, and Medicare payments to HMOs and prescription drug plans were pushed into March since April 1, 2018 fell on a non-business day.

Regardless of the reason, April is now in the record books.  Fortunately, its outsized surplus helps bring the deficit’s year-over-year comparison down to an increase of 11.9 percent versus 13.8 percent in March.  With just five months left in fiscal 2018, America’s budget shortfall is expected to continue increasing to an estimated $832.6 billion according to the Office of Management and Budget, headed by Mick Mulvaney.  Atlas recognizes there are many theories on how deficits will be handled in the future but finds deficits this large to be nerve-wracking.