US Treasury Unveils Budget Totals For Fiscal 2006

by Mike Godfrey, Tax-News.com, Washington

16 October 2006

In a joint statement published last week, US Treasury Secretary Henry Paulson and Director of the Office of Management and Budget, Robert Portman unveiled the budget results for fiscal year 2006.

The statement showed the actual budget totals for the fiscal year that ended September 30, 2006 to be as follows:

• A deficit of $248 billion;
• Total receipts of $2,407 billion; and
• Total outlays of $2,654 billion.

"This year we saw revenues at historic levels, with annual receipts up 12% and single-day corporate and total receipts hitting all-time highs on September 15. In the past two years we've seen the highest year-over-year revenue growth in 25 years. This good news has allowed us to exceed the President's target of cutting the deficit in half while maintaining a strong and growing economy," Paulson observed, continuing:

"Now we must stay on a responsible path to curb unnecessary spending. We must address the entitlement situation that weighs as the heaviest fiscal burden in our future and we must work together to find a solution."

Portman added that:

"The President's pro-growth policies are continuing to fuel a strong economy, solid job creation and record-breaking revenues. Together with a strong commitment to spending restraint, these revenues are driving down the deficit. When the President promised to cut the deficit in half in five years, some said it couldn't be done. Yet, it has now been achieved, three years ahead of schedule."

"Raising taxes and increasing spending would imperil the vibrant economy that has generated 6.6 million jobs in three years. Continuing to make progress in reducing the deficit and expanding the economy requires that we make the President's tax cuts permanent and continue to hold the line on spending."

Overall, the statement revealed, receipts in FY 2006 were 11.8% higher than in FY 2005. Together with last year's 14.5% receipt growth, this represents the highest rate of increase in receipts in two consecutive years since 1981.

The 11.8% increase in total receipts was driven by growth in individual and corporation income tax receipts, and social insurance and retirement receipts. In total, these receipts accounted for $236 billion of the $253 billion increase in receipts over FY 2005.

Receipts rose from 17.6% of GDP in 2005 to 18.4% of GDP in 2006.

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