May U.S. deficit $146.8B, up 23% from a year ago

Spending rises 10.7% to $363.9B; 8-month shortfall reaches $532.2B

WASHINGTON — The federal government recorded a budget deficit of $146.8 billion in May, helping push the total deficit so far this year 23 percent above the same period a year ago.

Last month’s deficit followed a surplus of $214.3 billion in April, a month that traditionally ends in the black because of the federal income tax filing deadline.

Spending rose by 10.7 percent to $363.9 billion, compared with a 9.7 percent fall in receipts to $217.1 billion a year earlier.

The Treasury Department reported Tuesday that the deficit for the first eight months of this budget year, which began Oct. 1, totals $532.2 billion. That’s up by $99.4 billion from the $432.9 billion imbalance run up during the same period last year.

The deficit increase reflects in part the impact of the $1.5 trillion tax cut that President Donald Trump pushed through Congress in December.

Many economy watchers expected the federal deficit to swell after the Trump administration enacted the tax cuts. The Trump administration has said the boost to economic growth from tax cuts, regulatory rollbacks and the trade agenda will lead to an increase in revenue.

The Congressional Budget Office is projecting that the deficit for this year will hit $804 billion, up $138 billion from last year’s deficit of $665.8 billion. And the Congressional Budget Office sees annual deficits rising past the $1 trillion mark under the impact of the 10-year tax cut passed last year, coupled with rising costs for Social Security and Medicare as more baby boomers reach retirement age.

Accumulating budget deficits add to the overall federal debt, which totalled more than $21.09 trillion as of Monday. That figure includes more than $5.6 trillion the government owes itself, including about $2.8 trillion borrowed from the Social Security Trust Fund, according to Treasury Department reports.

In a report last week, the trustees for Social Security and Medicare projected that $416 billion will need to be transferred from the government’s general revenue to pay benefits this year. It will mark the first time Social Security has had to rely on general revenue funds since the Reagan era.

The Treasury’s monthly budget report showed that, through the first eight months of this budget year, government revenue totaled $2.22 trillion, up 2.6 percent from the same period a year ago. Government outlays totaled $2.76 trillion, up a much larger 6 percent from the same period a year ago.