U.S. Posts Biggest Monthly Budget Deficit in May Since 2009
(Bloomberg) -- The U.S. posted a $146.8 billion budget deficit in May, the largest for the month since 2009, as revenue declined.
The budget gap rose 66 percent last month from a year earlier, the Treasury Department reported on Tuesday. Spending rose by 10.7 percent to $363.9 billion, compared with a 9.7 percent fall in receipts to $217.1 billion.
The government is facing increasing borrowing in the coming years partly due to tax cuts enacted this year and the strain on social and health spending from an aging population. For the first eight months of the fiscal year, the fiscal gap widened to $532.2 billion, up 23 percent from last year’s $432.9 billion deficit.
Tax and spending measures approved by President Donald Trump are expected to push the budget deficit to $804 billion in the current fiscal year, from $665 billion in fiscal 2017, and then surpass the $1 trillion-mark by 2020.
Many economy watchers expect the federal deficit will swell after the Trump administration enacted tax cuts late last year that will reduce federal revenue by $1.5 trillion over a decade. The Trump administration has said the boost to economic growth from tax cuts, regulatory rollbacks and the trade agenda will lead to an increase in revenue.
So far this fiscal year that started Oct. 1, spending jumped by 5.9 percent to $2.76 trillion and revenue increased by 2.6 percent gain to $2.22 trillion.
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