*Five* Takeaways on Federal Revenues, Spending, and Deficits
The Congressional Budget Office (CBO) released its latest report on the Fiscal Year 2018 federal budget. Here's what you need to know.
1. Revenues are up this year, even after the Tax Cuts and Jobs Act (TCJA) provided tax relief. CBO reports that FY2018 revenues are $13 billion higher than in FY2017, even after TCJA provided tax relief to families and job creators.
2. The major source of revenue rose strongly after TCJA. Counting just the months TCJA has been in effect (January-September), individual income and payroll tax collections—which together made up over 85% of FY 2018 revenues—rose by $66 billion.
3. Wages and salaries are rising thanks to TCJA. CBO credits rising wages and salaries for helping to boost individual and payroll tax collections by 4 percent during this fiscal year. In an earlier report, CBO noted that TCJA will raise wages.
4. This year's deficit is less severe than projected. The FY2018 deficit is $782 billion, which is $22 billion less than CBO projected it would be earlier this year.
5. Spending is still the problem. While revenues are up compared to last year, spending grew at a faster rate, which is why the FY2018 deficit increased $116 billion from last year.