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 Joint Statement of Secretary Lew and OMB Director Burwell on Budget Results for Fiscal Year 2013.docx

 Joint Statement of Secretary Lew and OMB Director Burwell on Budget Results for Fiscal Year 2013.docx

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Published by Becket Adams
Joint Statement of Secretary Lew and OMB Director Burwell on Budget Results for Fiscal Year 2013.docx
Joint Statement of Secretary Lew and OMB Director Burwell on Budget Results for Fiscal Year 2013.docx

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Published by: Becket Adams on Oct 30, 2013
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10/31/2013

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 Joint Statement of Secretary Lew and OMB Director Burwell on Budget Results for Fiscal Year 2013
10/30/2013
WASHINGTON
 
 – 
 U.S. Treasury Secretary Jacob J. Lew and Office of Management and Budget (OMB) Director Sylvia Mathews Burwell today released details of the fiscal year (FY) 2013 final budget results, which show continued and significant progress in reducing the deficit. The deficit in FY 2013 fell to $680
 billion, $409 billion less than the FY 2012 deficit and $293 billion less than forecast in President Obama’s
April Budget. As a percent of Gross Domestic Product (GDP), the deficit fell to 4.1 percent, representing a reduction of more than half from the deficit that the Administration inherited when the President took office in 2009. [1]
 
In his FY 2014 Budget, the President presented a plan that would make critical investments to strengthen the middle class, create jobs, and grow the economy while continuing to cut the deficit in a balanced way.
Building on the $2.5 trillion in deficit reduction already locked in, the President’s plan would replace the
economically damaging sequester while achieving additional deficit reduction to put Federal debt on a downward path as a share of the economy. And unlike sequestration, which includes no long-term deficit
reduction, the President’s plan includes structural reforms that would generate growing savings in the
second decade and beyond. Looking forward, the Administration remains committed to working with Congress to enact proposals that will both strengthen the economy and middle class by making needed investments in education, infrastructure, research and development, and national security, while putting debt as a share of the economy on a downward path.
―Under President Obama, the nation’s deficit has fallen for the past four years, the fastest pace of decline
over a sustained period since World War II. It is now less than half of what it was when the President took
office,‖ said Treasury Secretary Lew. ―Congress must build on this progress by crafting a pro
-jobs and pro-
growth budget agreement that strengthens the economy while maintaining fiscal discipline.‖
 
―We must remain
focused on measures that will support the middle class, strengthen the economic
recovery, promote the nation’s long
-term competitiveness, strengthen national security, and protect the
least fortunate among us,‖ said OMB Director Burwell. ―The President’s B
udget showed how we can do this while at the same time improving our long-
term fiscal outlook.‖
 
Summary of Fiscal Year 2013 Budget Results
 Year-end data from the
September 2013 Monthly Treasury Statement of Receipts and Outlays of the United States Government 
 show that the deficit for FY 2013 was $680 billion. This represents a decrease of $409  billion, or 38 percent, from last year. As a percentage of GDP, the deficit fell to 4.1 percent, down from 6.8  percent in FY 2012. The FY 2013 deficit of $680 billion was $293 billion or 30 percent less than the estimate in the FY 2014 Budget, and $79 billion or 10 percent less than estimated in the FY 2014 Mid-Session Review (MSR).
Table 1. Total Receipts, Outlays, and Deficit (in billions of dollars)
 
Receipts
 
Outlays
 
Deficit
 
FY 2012 Actual
 
2,449
 
3,538
 
-1,089
 
 
 Percentage of GDP
 
15.2%
 
22.0%
 
6.8%
 
FY 2013 Estimates:
 
2014 Budget
 
2,712
 
3,685
 
-973
 
2014 Mid-Session Review
 
2,777
 
3,536
 
-759
 
FY 2013 Actual
 
2,774
 
3,454
 
-680
 
Percentage of GDP
 
16.7%
 
20.8%
 
4.1%
 The significant decrease in the deficit from last year was due to a combination of higher receipts and lower outlays in FY 2013. Higher receipts accounted for 79 percent of the decline. Government receipts totaled $2,774 billion in FY 2013. This was $325 billion higher than in FY 2012, an increase of 13 percent. As a  percentage of GDP, receipts equaled 16.7 percent, 1.5 percentage points higher than in FY 2012. FY 2013 receipts were $62 billion higher than estimated in the FY 2014 Budget and $3 billion lower than the estimate in the FY 2014 MSR. The increase in receipts from FY 2012 can be attributed to a stronger economy and the expiration of certain tax provisions. Higher wages and salaries made collections of individual and payroll taxes strong throughout the year. The expiration of the temporary cut in payroll taxes and the increase in tax rates on income above certain thresholds enacted in the American Taxpayer Relief Act added to collections. Corporation income tax collections were another contributor to the increase in FY 2013. Additionally, collections increased for all other major sources of receipts except for Federal Reserve deposits of earnings. Outlays for FY 2013 were $3,454 billion, $84 billion below those in FY 2012, a 2 percent decrease. As a
 percentage of GDP, outlays were 20.8 percent, 1.2 percentage points down from last year’s 22.0 percent.
The reduction in outlays can be attributed to lower defense spending from the troop drawdown in Afghanistan, lower spending on unemployment compensation due to lower unemployment rates, higher dividend income from Fannie Mae and Freddie Mac, and spending cuts from sequestration across numerous agencies. These decreases were partially offset by increases in spending by the Departments of Agriculture and Health and Human Services (Medicare and Medicaid), and the Social Security Administration. Total Federal borrowing from the public increased by $702 billion during FY 2013 to $11,982 billion, or 72.1 percent of GDP. The increase in borrowing included $680 billion in borrowing to finance the deficit,
and $22 billion in borrowing related to other transactions that affected the Government’s financing
requirements, such as disbursements for direct student loans and other Federal credit programs. Total  borrowing from the public net of financial assets and liabilities increased by $680 billion during FY 2013 to $11,070 billion, or 66.6 percent of GDP. (This measure of net borrowing, as reported in the Monthly Treasury Statement, excludes the Federal Governmen
t’s holdings of Fannie Mae and Freddie Mac
 preferred stock. If those stock holdings were included, net borrowing as a percentage of GDP would be reduced by roughly one percentage point.) Below are explanations of the differences between estimates in the MSR and the year-end actual amounts for receipts and agency outlays.
Fiscal Year 2013 Receipts
 Total receipts for FY 2013 were $2,774.0 billion, $2.6 billion lower than the MSR estimate of $2,776.6  billion. This net decrease in receipts was attributable to higher-than-estimated collections of individual income taxes and estate and gift taxes, which were more than offset by lower-than-estimated collections of other sources of receipts. Table 2 displays actual receipts and estimates from the Budget and the MSR by source.
 
 
Individual income taxes
 were $1,316.4 billion, $6.7 billion higher than the MSR estimate. Withheld and nonwithheld payments of individual income tax liability were $3.8 billion and $4.2  billion higher than the MSR estimate, respectively. These increases were partially offset by higher-than-expected refunds of $1.3 billion.
 
Corporation income taxes
were $273.5 billion, $5.2 billion lower than the MSR estimate. This difference reflected lower-than-expected payments of 2013 corporation income tax liability of $5.1 billion.
 
Social insurance and retirement receipts
 were $947.8 billion, $3.5 billion lower than the MSR estimate. This reduction was primarily attributable to lower-than-estimated deposits by States to the unemployment insurance trust fund of $1.7 billion. Reductions in other sources of social insurance and retirement receipts
 — 
 primarily Social Security and Medicare payroll taxes
 — 
accounted for the remaining reduction in this source of receipts relative to the MSR estimate.
 
Excise taxes
 were $84.0 billion, $1.3 billion below the MSR estimate.
 
Estate and gift taxes
 were $18.9 billion, $1.2 billion greater than the MSR estimate.
 
Customs duties
 were $31.8 billion, $0.3 billion below the MSR estimate.
 
Miscellaneous receipts
 were $101.5 billion, $0.2 billion below the MSR estimate. Lower-than-expected deposits of earnings by the Federal Reserve System of $2.2 billion were offset by higher-than-anticipated collections of other miscellaneous receipts.
Fiscal Year 2013 Outlays
 Total outlays were $3,454.3 billion for FY 2013, $81.6 billion below the MSR estimate. Table 3 displays actual outlays by agency and major program as well as estimates from the Budget and the MSR. The largest changes in outlays from the MSR were in the following areas:
 
Department of Agriculture
 
 — 
 Outlays for the Department of Agriculture were $155.9 billion, $3.7 billion lower than the MSR estimate. o Supplemental Nutrition Assistance Program (SNAP) outlays were $1.6 billion lower than estimated in the MSR as a result of slightly lower September participation than expected, lower-than-expected per person benefits, and lower-than-expected needs for disaster assistance. Similarly, outlays in the Child Nutrition National School Lunch Program were $1.2 billion lower than estimated due to lower meal service participation, particularly in the "Paid" or full-price meal category. o Outlays for the Pigford discriminations claims settlement were $1.1 billion greater than anticipated, because the MSR anticipated claims would be paid in October 2013 (FY 2014),  but the claims were paid in September 2013 (FY 2013). o Net outlays for the Risk Management Agency's Federal Crop Insurance Fund were $0.8 billion lower than the MSR estimate. The
2008 Farm Bill changed the due date for farmers’ premium

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