The United States of America says a drop in earnings at the Federal Reserve System hurt the country’s operating performance in 2017.

The Washington-based nation is reporting a $665 billion loss for 2017 on $3.3 trillion in revenue, compared with a $585 billion loss on $3.3 trillion in revenue for 2016.

The U.S. government functions as a conglomerate in which the core health and retirement benefits programs accounted for about 48% of spending in 2017. Those programs also accounted for about 48% of spending in 2016.

(Related: Social Security Trust Funds Post Higher Gain)

Results for 2017 are available here, and results for 2016 are available here.

Year-Over-Year Comparisons

Total U.S. outlays increased 3.3% between 2016 and 2017, to about $4 trillion.

Total U.S. revenue increased just 1.5%.

Revenue from the United States’ core individual income tax, corporate income tax, Social Security tax, Medicare tax and estate and gift tax programs increased 3.1%, to $3 trillion.

Growth in Social Security tax and estate tax revenue was especially strong: Social Security payroll tax revenue increased 5.1%, to $851 billion, and estate and gift tax revenue jumped 9.5%, to $23 billion. 

But the Federal Reserve System contributed just $81 billion in earnings to the U.S. Treasury in 2017, down about 30%, from $116 billion, in 2016.

The United States as a whole generated about $19.4 trillion in “gross domestic product” (GDP), or national income, for 2017, up from $18.6 trillion in 2016.

Because of the Fed’s drop in earnings, the deficit amounted to 3.4% of GDP in 2017, up from 3.1% of GDP in 2016.

If the Fed had done as well in 2017 as in 2016, the deficit would have increased only slightly, to 3.2% of GDP.

The Future

The U.S. government released its 2017 results together with budget proposal for fiscal year 2019, which starts Oct. 1.

Social Security card (Image: Thinkstock)

(Image: Thinkstock)

Officials have provided estimates for the federal government’s 2018 results, along with projections for 2019.

The 2019 budget proposal shows that, between 2018 and 2019, U.S. GDP could increase 4.9%, to $21 trillion, and federal revenue could increase 2.5%, to $3.4 trillion. The deficit could rise 16%, to $964 billion.

Here are the projected changes, between 2018 and 2019, for core welfare program revenue and spending items:

REVENUE

Individual income tax revenue: +1.1%, to $1.7 trillion

Corporate income tax revenue: +3.2%, to $225 billion

Social Security tax revenue: +6.2%, to $905 billion

Medicare tax revenue: +6.2%, to $275 billion

Estate and gift tax revenue: -32%, to $17 billion

Federal Reserve System earnings: -24%, to $55 billion

OUTLAYS

Social Security benefits: +6.1%, to $1 trillion

Medicare benefits: +10%, to $640 billion

Medicaid benefits: +4.5%, to $420 billion

— Read Life Assets Grew More Slowly Than U.S. Wealth: Fed on ThinkAdvisor.

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