April Revenues Weak:  FY2003 Deficit Likely to Top $350 Billion 
Jeff Lemieux
5/10/2003

CBO Reports Smallest April Surplus Since 1995.

The Congressional Budget Office (CBO) reported yesterday that the surplus for April was $50 billion, the lowest April surplus since 1995.  Revenues for April were down $8 billion from last year.  For the first seven months of fiscal year 2003, revenues are down from the same period in 2002 by $62 billion, or 5.5 percent.  The federal deficit for the first seven months of fiscal year 2003 rose to $202 billion, a deterioration of $138 billion compared with the first seven months of fiscal year 2002.  (During the first seven months of fiscal year 2002, the deficit was $65 billion -- the figures don't add precisely because of rounding.)

Including the recent supplemental appropiation for defense and international affairs that increases the deficit in 2003 by about $40 billion, and presuming that a tax cut is enacted in the coming weeks that would increase the deficit by $50 billion in 2003, the total deficit for the fiscal year could easily exceed $350 billion, about 3.3 percent of GDP.  If the additional tax cuts in fiscal years 2004 and 2005 average $100 billion a year, a forecast of deficits exceeding 3 percent of GDP in those years would be reasonable.

Links
Congressional Budget Office Monthly Budget Review (May 9, 2003)
Joint Committee on Taxation Estimate of Senate Finance Committee Tax Cut Package (as scheduled for mark-up on May 8, 2003)
Joint Committee on Taxation Estimate of House Tax Cut Package (May 5, 2003)
Centrists.Org No-BS Budget Baseline (May 10, 2003)