Budget deficit swells in July

WASHINGTON — The federal government racked up a $76.9 billion deficit in July, with increased government spending and tax cuts keeping the country on track to record its biggest annual deficit in six years. The $76.9 billion deficit compared to a deficit of $42.9 billion in July 2017.

The Treasury Department reported Friday that in the first 10 months of this budget year, the deficit totaled $684 billion.

Revenues are up 1 percent this year, the increase held back by a drop in corporate tax payments. Corporate taxes are down 20 percent — $55 billion — from the same period a year ago. Spending is up 4.4 percent, reflecting a boost Congress approved this year for domestic and military programs and the rising costs of financing the debt.

The Trump administration last month revised upward its deficit estimates, projecting annual deficits will once again top $1 trillion next year.

For the current budget year, which ends Sept. 30, the administration is now projecting a deficit of $890 billion. That would be up 33.7 percent from last year's deficit of $665.8 billion.

The administration's July estimates project that the deficit will top $1 trillion in 2019, climbing to $1.1 trillion that year, and remaining above $1 trillion for three years.

The only other period when the federal government ran deficits above $1 trillion was for four years from 2009 through 2011. That's when the Obama administration was using tax cuts and increased spending, along with support for the banking system, to combat the 2008 financial crisis and Great Recession, the worst economic downturn since the Great Depression of the 1930s.