WASHINGTON -- The federal budget deficit in fiscal 1993 dropped to $255 billion from 1992's record of $290 billion, thanks to a pickup in revenue growth and a slow-down in spending growth, the Treasury reported yesterday.
The drop was in line with analysts' expectations, but notably lower than the Clinton Administration's most recent prediction in July that forecast a $285 billion deficit for fiscal 1993, which ended Sept. 30.
The 1993 deficit was down 12% from the 1992 total, and the first decline in four years. The deficit fell because federal receipts grew faster than outlays. Receipts grew 5.8% in 1993, up from a 3.6% gain in 1992, while outlays advanced 2.0% in 1993, down from a 4.4% increase in 1992.
Household and corporate tax payments were also notably stronger in 1993. Personal income tax receipts totaled $510 billion in 1993, up 7.1% from 1992; and corporate income tax receipts totaled $118 billion, up 18% from the previous year, the Treasury report said.
The ongoing delay in the savings and loan bailout and cuts in defense spending also accounted for a large share of the savings in 1993, according to the report.
The Resolution Trust Corporation generated a $19 billion surplus in 1993, rather than a deficit, the department reported. The agency lost its authority to spend federal funds to liquidate failing thrifts in April 1992. Since then, the agency only can sell off assets it already seized without the ability to take control of other failing thrifts.
In addition, the government spent $278.6 billion on the military in 1993, roughly $8 billion less than in 1992, the report said.
Falling interest rates during fiscal 1993 also contributed to the lower deficit. The interest expense on total outstanding public debt in 1993 was essentially unchanged from 1992, even though total debt grew substantially during the year. The government paid $ 292.5 billion in interest on total federal debt in 1993, compared with $292.3 billion in 1992.
In the report, the administration predicted that the deficit in fiscal 1994 will be $260 billion. If realized, that would mean essentially no change in total borrowing compared to the $255 billion deficit for 1993.
Private analysts are slightly more optimistic. Kathleen Stephansen, an economist with Donaldson, Lufkin & Jenrette Securities Corp., forecast a total federal deficit of $240 billion in 1994.
Louis Crandall, chief economist of R.H. Wrightson & Associates Inc., predicted a $240 billion to $250 billion deficit in 1994, excluding the effects of possible renewed funding for the savings and loan bailout.
The 1993 federal deficit represented 4.1% of total U.S. gross domestic product for that 12-month period, down from 4.9% in 1992, the Treasury said.
The last time the government ran a budget surplus was 1969, when it took in $3.2 billion more than it spent. [TABULAR DATA OMITTED]