WASHINGTON — The U.S. government’s budget deficit rose by $183 billion to $866.8 billion during the first 10 months of this budget year as spending grew more than twice as fast as tax collections.
The Treasury Department reported Monday that the year-to-date deficit for fiscal 2019, which ends Sept. 30, is up 27% from the same period a year earlier and exceeds the full-year figure for the previous fiscal year — $779 billion — which was the largest federal deficit since 2012.
So far in the fiscal year that began Oct. 1, federal spending rose 8% to $3.73 trillion while tax revenue rose 3% to $2.86 trillion, the department said. While still a modest source of income, tariffs imposed by President Donald Trump helped almost double customs duties to $57 billion in the period.
Republican tax cuts, increased federal spending and caring for an aging population have contributed to the fiscal strains, though the GOP says tax changes enacted last year will spur economic growth and lift government revenue. Corporate income-tax receipts rose 3% between October and July, while individual income taxes gained 1%, according to Treasury data.
The annual budget deficit is expected to exceed $1 trillion starting in 2022, the Congressional Budget Office has said. The nonpartisan agency is scheduled to update its latest 10-year budget and economic forecasts on Aug. 21.
For the month of July, the budget deficit was $119.7 billion, compared with $76.9 billion a year earlier, according to Treasury. Still, “July 2019 was a record receipts month, and the month is generally a deficit month — 63 of the last 65 times,” a senior Treasury official said in an accompanying statement.
Accumulating deficits add to the overall federal debt, which totaled more than $22.33 trillion as of Friday. 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.
On July 29, the Treasury Department said it expects to borrow $433 billion in the current July-September quarter. That would be the largest quarterly borrowing total since early 2018, as the government replenishes its cash reserves following a fresh agreement to raise the debt limit.
Treasury said the $433 billion in borrowing it expects this quarter, through selling Treasury bonds and bills to the public, would be the largest quarterly total since it borrowed $488 billion in the January-March quarter of 2018.
Market borrowing for this budget year is projected to total $1.27 trillion, a 6.5% increase from the $1.195 trillion borrowed in the 2018 budget year.
The rising borrowing needs reflect that the government’s deficit is increasing.
In the two-year, $2.7 trillion budget deal on discretionary spending passed by Congress and signed into law by Trump on Aug. 2, the existing $22 trillion debt ceiling was suspended until July 31, 2021.
That will allow the government to borrow as much as it needs to pay its bills until the new deadline without facing the threat of a default on the nation’s debt.
Information for this story was contributed by Sarah McGregor and Sophie Caronello of Bloomberg News; and by Paul Wiseman and Martin Crutsinger of The Associated Press.