U.S. Treasury Secretary Jacob J. Lew and Office of Management and Budget (OMB) Director Shaun Donovan recently released details of the fiscal year (FY) 2016 final budget results which reported that the deficit in FY 2016 was $587 billion. This was $28 billion less than forecast in President Obama’s FY 2017 Budget and $12 billion less than forecast in the FY 2017 Mid-Session Review (MSR).
“The Obama Administration’s agenda has spurred durable economic growth and the longest streak of job growth on record, while sharply reducing the deficit to a sustainable level,” said Treasury Secretary Lew. “We have built a solid foundation for continued investment in economic growth and opportunity for all, while maintaining fiscal discipline and using fiscal space appropriately to grow the economy.”
Year-end data from the September 2016 Monthly Treasury Statement of Receipts and Outlays of the United States Government show that the deficit for FY 2016 was $587 billion, an increase of $148 billion from the prior year. The report says that outlays rose by 5 percent from FY 2015, while receipts rose by less than 1 percent. This is attributed to be largely from the pattern of tax collections following the expiration and subsequent extension of certain tax provisions last year.
More specifically, outlays for the Department of Housing and Urban Development (HUD) were $26.4 billion. This was $1.3 billion lower than the MSR estimate.
The report states that this difference was driven primarily by slower-than-expected drawdowns of Community Development Block Grant (CDBG) Disaster Recovery funds for Hurricane Sandy and delays in finalizing CDBG agreements with States and localities. It was also attributed to an increase in Federal Housing Administration mortgage loan volume in the last quarter, which generated more negative subsidy receipts than anticipated as well as slower-than-expected drawdowns of Homeless Assistance Grants, including those associated with new or reallocated Continuum of Care projects.
“The President has consistently put forward a budget that demonstrates investments in growth and opportunity are compatible with putting the Nation’s finances on a strong and sustainable path. We have achieved remarkable fiscal progress under the President’s leadership: As a share of the economy, the deficit in 2016 was about two-thirds lower than its 2009 level. The President’s policies in his 2017 Budget would drive the deficit down to 2.3 percent of GDP in 2017 and keep it below 3 percent of GDP over the next ten years,” said OMB Director Donovan. “And, the deficit in 2016 would have been meaningfully lower if Congress hadn’t passed unpaid-for business tax cuts at the end of 2015.”