WASHINGTON (AP) — The federal government recorded a $160.3 billion surplus in April as revenues for the month jumped to an all-time high. But even with a flood of tax receipts, the deficit so far this year is running 37.7% higher than a year ago.
The Treasury Department reported Friday that the deficit for the first seven months of the budget year that began Oct. 1 totals $530.9 billion, compared to a deficit of $385.5 billion for the same period a year ago.
The Trump administration projected in March that this year’s deficit will hit $1.1 trillion, up from last year’s deficit of $779 billion. The administration is projecting the deficit will stay above $1 trillion for four straight years before starting to decline for the rest of the decade.
The deficits have increased following congressional passage in December 2017 of a $1.5 trillion tax cut promoted by President Donald Trump as well as a boost last year in spending on domestic and military programs.
The Congressional Budget Office is projecting that the deficit this year will climb to $896 billion, smaller than the administration’s $1.1 trillion forecast but still 15% higher than last year.
The CBO shows slightly smaller deficits in the short-term, projecting that they will remain below $1 trillion through 2021 but after that will top $1 trillion and will remain above the $1 trillion mark for the rest of the decade.
WASHINGTON—The U.S. budget gap widened 38% in the first seven months of the fiscal year as federal spending outpaced tax collections.
The government ran a $531 billion deficit from October through April, the Treasury Department said Friday, compared with $385 billion during the same period a year earlier, a 38% increase. Federal outlays rose 8%, to nearly $2.6 trillion, while revenues increased 2%, to $2.04 trillion—a record for the seven-month period.
Part of the increase in the deficit was attributable to a shift in the timing of certain federal benefit payments, which made the deficit appear larger. If not for those timing shifts, the deficit would have risen 23% from the same period in fiscal year 2018.
Increased spending on the military, health care and interest on the debt contributed to higher outlays so far this fiscal year, which began Oct. 1. Meanwhile, individual tax receipts—including changes in tax refunds—increased 2.5% over the first seven months of the fiscal year, a senior Treasury official said Friday.
“Despite the fact that we have lower tax rates, that’s been more than offset by the increase in wages and increase in employment,” the official said.
The tax code overhaul enacted in 2017 had constrained federal revenues last year. Going forward, Treasury expects revenue collection to increase as rising wages boost workers’ paychecks, and a historically low jobless rate continues to pull workers back into the labor market.
Another source of rising revenues this fiscal year has been tariff collections, which nearly doubled from October through April, to $39.9 billion from $21.8 billion in the same period a year ago. The Trump administration on Friday increased tariffs on $200 billion in Chinese goods to 25% amid continuing trade talks between the U.S. and China.