US budget deficit jumps less than expected
AFTER falling for several years, the US budget deficit jumped nearly 34 percent in fiscal 2016, the Treasury Department announced, but the shortfall was still smaller than originally planned.
The Obama administration’s budget for the year to September 30 came in with a US$587 billion deficit, out of the $3.85 trillion spent.
A deficit of $28 billion more was forecast in President Barack Obama’s fiscal 2017 budget earlier this year, but lower spending than expected by a number of government departments limited the rise.
The deficit was far below the trillion-dollar shortfalls of 2009-13 when government spending soared on efforts to rescue the finance and auto sectors.
Even if the 2016 deficit came in under forecasts, slower growth over the past year meant that the ratio of debt to gross economic product – which measures the weight of debt on the economy – jumped to 3.2pc from 2.5pc in fiscal 2015.
US Treasury Secretary Jacob Lew said the deficit would have been smaller if business tax cuts instituted by Congress in late 2015 had been counterbalanced by measures to boost government income. –