Monthly U.S. bud­get deficit soars

Northwest Arkansas Democrat-Gazette - - NATIONAL - CHRISTO­PHER S. RUGABER

WASH­ING­TON — The fed­eral gov­ern­ment’s bud­get deficit rose from a year ear­lier for the se­cond-straight month, the lat­est sign of a ris­ing fi­nanc­ing gap.

The Trea­sury De­part­ment said Thurs­day that the De­cem­ber bud­get deficit was $27.5 bil­lion, nearly dou­ble the $14 bil­lion in De­cem­ber 2015. In the first three months of the gov­ern­ment’s bud­get year, the deficit was about $208 bil­lion, slightly be­low last year’s to­tal. But ad­just­ing for cal­en­dar quirks that moved some large ben­e­fit pay­ments into Septem­ber, the deficit has wors­ened in the past three months.

The ad­justed deficit for Oc­to­ber through De­cem­ber was $230 bil­lion, up about one-third from $174 bil­lion a year ago. The fed­eral gov­ern­ment’s largest health care pro­grams, Medi­care and Med­i­caid, saw spend­ing in­crease 5 per­cent and 6 per­cent, re­spec­tively.

De­cem­ber’s deficit was largely driven by a 9 per­cent drop in rev­enue. Cor­po­rate tax re­ceipts fell 6 per­cent, but the big­gest drag was from a drop in earn­ings from the Fed­eral Re­serve. Pay­ments from the Fed fell 80 per­cent. The Fed is earn­ing in­ter­est pay­ments on its port­fo­lio of Trea­surys and mort­gage-backed se­cu­ri­ties, pur­chased af­ter the fi­nan­cial cri­sis to hold down in­ter­est rates.

Un­der a new law from Congress, the Fed paid most of those earn­ings to the Trea­sury in the gov­ern­ment’s 2016 bud­get year, re­sult­ing in a much smaller pay­ment from the Fed last month.

Gov­ern­ment spend­ing also fell in De­cem­ber, but the drop was smaller than the de­cline in rev­enue. Spend­ing fell 5 per­cent to $347 bil­lion, led by a drop in So­cial Se­cu­rity pay­ments.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.