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by Jim Quinn

U.S. budget deficit jumps 34% in October, gap set to top $1 trillion in 2020

The numbers: The federal government’s budget deficit in October rose 34% from a year earlier to $134.5 billion, putting the U.S. on course to top the $1 trillion mark in fiscal 2020 for the first time in eight years.

What happened: Government spending increased 8% in October to $380 billion compared to a year earlier. Federal outlays rose for defense, education, health and Social Security.

The amount of tax receipts the government took in, meanwhile, dipped 3% to $246 billion. Excise taxes fell sharply and income and corporate taxes also declined.

The government collected $7.8 billion in customs duties in October, up from $5.6 billion in the same month a year ago. These duties surged after the Trump administration imposed stiff tariffs on Chinese goods starting in mid-2018.

Big picture: U.S. budget deficits began increasing again in 2016 and have risen four straight years. A combination of large tax cuts in 2017 and higher federal spending is expected to push the deficit above $1 trillion in the current fiscal year that ends next September or nearly 5% of gross domestic product.

It’ll be the first time the deficit has topped the $1 trillion mark since 2012. Deficits topped $1 trillion for four straight years from 2009 to 2012 in the aftermath of the Great Recession.


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