WASHINGTON (AP) — The federal government recorded a deficit of $100.5 billion in October, a big increase from a year ago that was primarily caused by quirks in the calendar. The Treasury Department said Tuesday…
WASHINGTON (AP) — The federal government recorded a deficit of $100.5 billion in October, a big increase from a year ago that was primarily caused by quirks in the calendar.
The Treasury Department said Tuesday that the deficit shot up 59 percent from the same month a year ago. Last year’s October deficit was smaller because the government paid $48 billion in benefits in September because Oct. 1 fell on the weekend.
The government has run a deficit in every October going back to the early 1950s. The new report begins a budget year in which the federal deficit is expected to soar above $1 trillion, reflecting in part the $1.5 trillion in tax cuts Congress approved last December.
In its latest review this summer, the administration projected that the deficit would climb to $1.09 trillion this year and stay above $1 trillion for three straight years.
The only time the government has run deficits of this size was for four years from 2009 through 2012. Government revenues at the time were depressed by the worst recession since the 1930s. The US boosted spending to grapple with the fallout from the 2008 financial crisis and provide benefit payments to millions of people who lost their jobs.
The huge deficits during that period triggered a substantial backlash, which led to government shutdowns as conservative Republicans battled the Obama administration in an effort to cut government spending. This time the outcry has not been as loud.
Republican lawmakers enthusiastically supported the 10-year $1.5 trillion tax cut approved last year. Democrats charged that most of the benefits went to corporations and wealthy individuals.
While the deficits were not a major issue in most mid-term races this year, Trump has said that the new budget he will present to Congress next February will require 5 percent spending cuts for domestic agencies. Larry Kudlow, head of the president’s National Economic Council, promised in a CNBC interview Tuesday that the administration would produce a “tough budget” for the new year.
The October report showed that among the biggest increases in spending from a year ago was in interest payments on the public debt, which totaled $32 billion, 30 percent more than a year ago.
Total outlays in October were $353.2 billion, up 18.3 percent from a year ago, a jump that was heavily influenced by the fact that Social Security and other benefits for October 2017 had been paid in September of last year.
Government revenues totaled $252.7 billion, an increase of 7.3 percent from a year ago as a strong economy and low unemployment have offset some of the losses from the tax cuts.