The federal government collected more in taxes during the first half of fiscal year 2015 than it did the previous year, spent more money and increased the deficit.
According to the latest Congressional Budget Office (CBO) report, the federal government collected $1.42 trillion in taxes during the first six months of fiscal 2015, $98 billion more than the $1.32 trillion collected in the same period last year.
Most of the money was collected through individual income tax. Americans shelled out $642 billion to Uncle Sam in the first half of fiscal 2015, compared to $585 billion in 2014, a 9.7 percent increase. Businesses paid the government $133 billion in corporate income taxes, a 12.8 percent increase from the $118 billion paid in 2014. Payroll tax payments also increased by $18 billion.
The federal government spent even more - $1.851 trillion, $115 billion more than the previous year, resulting in a larger deficit. "The federal government ran a budget deficit of $430 billion for the first half of fiscal year 2015, CBO estimates - $17 billion more than the shortfall recorded in the same span last year," the CBO said.
An increase in Medicaid enrollment due to provisions in the Affordable Care Act was listed as one reason for the increase in spending. "Outlays for Medicaid rose by $31 billion (or 22 percent), largely because most of the provisions of the Affordable Care Act that led to increased enrollment in Medicaid went into effect in January 2014 and therefore did not affect the program's spending in the first few months of fiscal year 2014 [which began in October 2013]," the CBO said.
Medicare spending also increased by $23 billion from last year, about 9 percent. The CBO said this was because of a large payment to prescription drug plans made in October 2014 to account for unanticipated spending increases. Incentive payments were also made to health care providers so they could begin using electronic health record systems. Social Security benefits rose by $19 billion, or 4 percent.
A $46 billion decrease in Fannie May and Freddie Mac loan repayments also contributed.
"Because those payments are recorded in the budget as offsetting receipts, which are treated as reductions in outlays, that decrease in payments has resulted in higher outlays," the report said.
