- Deficit in first 11 months of FY rises by a third vs year ago
- Federal spending rose by 7%, outpacing revenue gains of 1%
The U.S. budget deficit widened to $898 billion in the 11 months through August, exceeding the Congressional Budget Office’s forecast for the first full fiscal year under the Trump presidency.
The budget deficit rose by a third in the October to August period from $674 billion in the same timeframe a year earlier, the Treasury Department said in a statement on Thursday. Spending rose by 7 percent to $3.88 trillion, outpacing revenue gains of 1 percent to $2.99 trillion. Revenue from corporations fell to $163 billion, down by $71 billion from a year ago.
The U.S. fiscal gap has continued to balloon under President Donald Trump, raising concerns the country’s debt load, now at $21.5 trillion, is growing out of control. A combination of Republican tax cuts enacted this year — that will add up to about $1.5 trillion over a decade — and increased government spending are adding to budget strains.
The White House says the tax cuts will pay for themselves by creating more revenue through faster economic growth. The International Monetary Fund has warned the tax reductions risk putting the nation’s debt on an unsustainable path and could cause the economy to overheat.
The 2017 fiscal gap was $666 billion, up from $586 billion a year earlier, according to the Treasury department. The CBO, a non-partisan congressional research body, estimated in April that the budget deficit for the entire fiscal year would increase to $804 billion, before widening to $981 billion in fiscal 2019 and topping $1 trillion in 2020.
Before the CBO incorporated tax cuts and spending hikes into its projections, the group forecast the U.S. deficit would exceed $1 trillion by 2022.