US bud­get deficit shrank in May

Pakistan Observer - - 14 -

WASH­ING­TON—The fed­eral gov­ern­ment’s bud­get deficit shrank sharply in May be­cause of a cal­en­dar quirk. But even with lat­est im­prove­ment, the deficit for the first eight months of this bud­get year is larger than last year.

The Trea­sury De­part­ment said Fri­day that the deficit last month to­talled $52.5 bil­lion, down from a deficit of $84.1 bil­lion in May 2015.

How­ever, much of the re­sult re­flected nearly $40 bil­lion in May ben­e­fits that were paid in April be­cause May 1 fell on a Sun­day.

For the first eight months of this bud­get year, the deficit to­tals $407.1 bil­lion, an 11 per cent in­crease over the $366.8 bil­lion deficit recorded for the same pe­riod last year.

The Con­gres­sional Bud­get Of­fice is fore­cast­ing that this year’s deficit will end up be­ing 21.9 per cent higher than last year.

Last year’s deficit dropped to $439 bil­lion, the small­est deficit in eight years.

It’s a sig­nif­i­cant im­prove­ment from the first four years of the Obama ad­min­is­tra­tion when the deficits topped $1 tril­lion an­nu­ally, re­flect­ing the im­pact of a deep re­ces­sion on gov­ern­ment tax rev­enues and var­i­ous ef­forts the gov­ern­ment was mak­ing to jump-start eco­nomic growth and sta­bilise the na­tion’s bank­ing sys­tem.

But CBO projects that deficits will keep grow­ing over the next decade and will once again top $1 tril­lion an­nu­ally be­gin­ning in 2022. Much of the in­crease in deficits will re­flect higher costs for So­cial Se­cu­rity and Medi­care as mil­lions of baby boomers re­tire.

So far this bud­get year, which be­gan on Oc­to­ber 1, gov­ern­ment re­ceipts to­tal $2.14 tril­lion, an in­crease of 1.7 per cent over the same eight months last year.

Gov­ern­ment out­lays to­tal $2.55 tril­lion, an in­crease of 3.1 per cent over the same pe­riod a year ago.—AP

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