A primer on the U.S. federal budget deficit, including an examination of political policies and economic factors adding to the deficit and a look at future deficit projections

1. The Budget Deficit
Created Exclusively for National Journal Members
Updated: May 15, 2013

2. Roadmap
2
Primer on Deficit
Factors Contributing to Current Deficit
Future Scenarios Impacting Deficit

3. Key Terms
Source: Congressional Budget Office. 3
Federal Budget Deficit
The annual amount by which government spending
exceeds government revenue
FY 2012 Budget Deficit $1.1T U.S. dollars*
*rounded to nearest tenth

4. FY 2012 Budget Deficit Math
Source: White House Office of Management and Budget.
Revenue
FY 2012: $2.4T
Spending
FY 2012: $3.5T
Dollars “in the Door”… …Exceeded by Dollars “Out the
Door”
Corporate
Income Tax
$242B
Excise and
Other
Taxes
$230B
Individual
Income Tax
$1,132B
Social
Insurance Tax
$845B
Non-
Defense
$1,155B
Social
Security
$768B
Medicare
$466B
Medicaid
$251B
Defense
$677B
4
Net Interest
$220B
Budget Deficit
• $1.1T in FY 2012

5. Budget Deficit Has Hit Record Highs in Past Five Years
Source: Congressional Budget Office, May 2013.
Analysis
• Deficit expected to decrease from FY 2012 to FY 2015 but remain at historically high levels through next decade
• Deficit will increase steadily from FY 2015 to FY 2023 due to rising health care costs and entitlement spending as
well as interest payments on federal debt
Recorded deficit Projected deficit
U.S. Deficit and Surplus
$400B
$0B
-$400B
-$800B
-$1,200B
-$1,600B
Projected Deficit
• $642B in FY
2013
• $895B in FY
2023

6. Roadmap
6
Primer on Deficit
Factors Contributing to Current Deficit
Future Scenarios Impacting Deficit