The Federal Budget Deficit: A Discussion of Recent Trends (CRS Report for Congress)
| Release Date |
Revised March 2, 2005 |
| Report Number |
RS21786 |
| Report Type |
Report |
| Authors |
Gregg Esenwein, Marc Labonte, and Philip Winters, Government and Finance Division |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
The federal budget deficit in FY2004 was 3.6% of gross domestic product (GDP).When the influence of economic conditions and temporary factors is excluded from themeasurement of budget balances, the FY2004 deficit was 2.6% of GDP. By eithermeasure, the deficit is above the historical average for the last 50 years.The FY2004 deficit represents a dramatic turnaround from the FY2000 surplus of2.4% of GDP. Most of this turnaround can be traced to a fall in receipts, from a 50-yearhigh of 20.9% of GDP in FY2000 to a 45-year low of 16.3% of GDP in FY2004.In percentage terms, tax cuts accounted for approximately 45% of the decline in thefederal budget balance between FY2000 and FY2004. The downturn in the economyand temporary factors were responsible for about 38% of the deterioration in federalfinances, while increases in federal outlays as a percentage of GDP were responsible foranother 17%.
