US budget deficit running 11.8% higher this year


US budget deficit running 11.8% higher this year

Wednesday, January 15, 2020

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THE US budget deficit through the first three months of this budget year is up 11.8% from the same period a year ago, putting the country on track to record its first US$1 trillion deficit in eight years.

In its monthly budget report, the US Treasury Department said recently that the deficit from October through December totalled US$356.6 billion, up from US$318.9 billion for the same period last year.

Both government spending and revenues set records for the first three months of this budget year but spending rose at a faster clip than tax collections, pushing the deficit total up.

The Congressional Budget Office is projecting that the deficit for the current 2020 budget year will hit US$1 trillion and will remain over US$1 trillion for the next decade.

The country has not experienced US$1 trillion in annual deficits since the period from 2009 through 2012, following the 2008 financial crisis.

The actual deficit for the 2019 budget year, which ended September 30, was US$984.4 billion, up 26% from the 2018 imbalance, reflecting the impact of the US$1.5-trillion tax cut President Donald Trump pushed through Congress in 2017, and increased spending for military and domestic programmes that Trump accepted as part of a budget deal with Democrats.

The projections of trillion- dollar deficits are in contrast to Trump's campaign promise in 2016 that even with his proposed tax cuts he would be able to eliminate future deficits with cuts in spending and growth in revenues that would result from a stronger economy.

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