Preliminary budget estimates by the Department of Treasury for Fiscal Year 1996, which ended on September 30, 1996, puts the budget deficit for FY 1996 at only $107.3 billion, a significant drop from FY 1995 and the fourth consecutive drop since the record $290.4 billion deficit of 1992. The last time the deficit was lower than this was in 1981.
The table below gives a breakdown of some of the major spending categories and how they have changed over the last five years.
| Outlays, Revenues, and Deficits U.S. Government, FY 92-96 Billions $ |
|||||
|---|---|---|---|---|---|
| Outlays | 1992 | 1993 | 1994 | 1995 | 1996 |
| Defense | 298.4 | 291.1 | 281.6 | 272.1 | 265.4 |
| Social Security | 287.6 | 304.6 | 319.6 | 335.8 | 349.6 |
| Medical/Health | 208.5 | 230.0 | 251.8 | 275.3 | 293.1 |
| Income Security | 197.0 | 207.3 | 214.0 | 220.4 | 225.3 |
| Interest on the Debt | 199.4 | 198.8 | 203.0 | 232.2 | 241.1 |
| Other | 190.0 | 176.4 | 190.9 | 183.3 | 185.6 |
| TOTAL OUTLAYS | 1,380.9 | 1,408.2 | 1,460.9 | 1,519.1 | 1,560.1 |
| Less: REVENUES | 1,090.5 | 1,153.5 | 1,257.7 | 1,355.2 | 1,452.8 |
| Equals: DEFICIT | 290.4 | 254.7 | 203.2 | 163.9 | 107.3 |
Sources: Data for 1992-1995 from Table 1.2 of Red Ink, for FY 1996 from U.S. Treasury estimates available at http://www.ustreas.gov/treasury/bureaus/finman/mts/mts.html.
Much of the success in continuing deficit reduction is due to economic growth, which equaled an unexpected 4.7% in the third quarter of the government's fiscal year. Revenues, at $1.45 trillion, grew from the prior year at 7.2%. So long as outlays grow at a lesser rate, progress will be made on deficit reduction.
The continuing cutbacks in Defense were planned and had a significant effect, as can be seen. Some relief, however, came from an unexpected source - spending on health care at the federal level, which includes the huge Medicare and Medicaid programs, grew at only 6.5%, nearly 2% less than expected.
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