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The U.S. fiscal deficit has already exceeded the full-year figure for last year, as spending growth outpaces revenue.
The gap grew to $866.8 billion in the first 10 months of the fiscal year, up 27% from the same period a year earlier, the Treasury Department said in its monthly budget report on Monday. That’s wider than last fiscal year’s shortfall of $779 billion — which was the largest federal deficit since 2012.
So far in the fiscal year that began Oct. 1, a revenue increase of 3% hasn’t kept pace with a 8% rise in spending. While still a modest source of income, tariffs imposed by the Trump administration helped almost double customs duties to $57 billion in the period.
Republican tax cuts, increased federal spending and an aging population have contributed to the fiscal strains, though the GOP says tax reform enacted last year will spur economic growth and lift government revenue. Corporate income-tax receipts rose 3% between October and July, while individual income taxes gained 1%, according to Treasury data.
The annual budget deficit is expected to exceed $1 trillion starting in 2022, the Congressional Budget Office has said. The non-partisan agency is scheduled to update its latest 10-year budget and economic forecasts on Aug. 21.
For the month of July, the budget deficit was $119.7 billion, compared with $76.9 billion a year earlier, according to Treasury. Still, “July 2019 was a record receipts month, and the month is generally a deficit month — 63 of the last 65 times,” a senior Treasury official said in an accompanying statement.