US Budget Deficit Jumped By $140 Billion Through June
WASHINGTON – The U.S. budget deficit increased by $140 billion during the first nine months of the current fiscal year, rising to $747.1 billion, the Treasury Department said Thursday.
The department said the deficit for the current fiscal year through June is up 23.1% over the same period a year ago, with receipts rising by 2.7% while spending increased 6.6%.
In the meantime, the cost of the net interest the government owes grew by 16.4% during the first nine months of this fiscal year compared to the same period last year, far outpacing Defense spending (8.4%), Medicare (6.4%), Social Security (5.6%) and Transportation (4.6%).
For the October to June period, government receipts have totaled $2.61 trillion while spending totaled $3.36 trillion, both record amounts for the first nine months of the budget year.
The disparity between the two numbers reflects a variety of factors including a $1.5 trillion tax cut President Donald Trump pushed through Congress in late 2017 and billions of dollars in extra spending Congress approved in early 2018.
One big increase on the revenue side of the ledger was a 78% jump in customs duties, which total $52 billion so far this budget year.
Trump in May announced that he was doubling the punitive tariff he had imposed on $250 billion of Chinese goods from 10% to 25% after talks on a new trade agreement broke down.
As for the future, that’s anybody’s guess. The Trump administration has forecast the deficit for the full budget year, which ends on Sept. 30, will top $1 trillion, up from a deficit of $779 billion last year.
The Congressional Budget Office, meanwhile, is forecasting a deficit of $896 billion this year.
At the same time, however, the CBO has projected deficits will top $1 trillion beginning in 2022 and will remain above $1 trillion annually through 2029.
The outlook for next year is even fuzzier.
Congress and the Trump administration have yet to agree on a spending plan for the next fiscal year, which starts on October 1.
In addition, Congress must pass an increase to the debt ceiling, something the White House would like to see done before the August recess, or risk an unprecedented default in the $22 trillion national debt.
So far, though negotiators appear to be far from hashing out a final budget deal.
Thursday’s report led to renewed warnings from the Peter G. Peterson Foundation that it is long past time for the U.S. government to get its fiscal house in order and rein in the debt, the fastest growing federal budget category.
The foundation noted that in FY 2018, the federal government spent more on interest than it did on budget areas such as veterans’ benefits, transportation, and administration of justice; that the government is currently spending an average of over $1 billion per day to service the debt; and that over the course of the current year, the government will spend an approximate average of $3,000 per American family on net interest alone.
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