WASHINGTON: The U.S. budget deficit widened last month, highlighting the growing mismatch between government spending and revenues. The federal government ran a $136.65 billion deficit in November, the Treasury Department said Monday. That was more than double the federal budget deficit of $64.55 billion in November 2015, largely because of a quirk of the calendar.
Economists surveyed by The Wall Street Journal had expected a budget deficit last month of $135 billion. In November, total receipts were down about 2% from the same month a year earlier. Total federal outlays rose roughly 25% compared with November 2015, when some scheduled benefit payments had been recorded instead in October 2015 because Nov. 1 fell on a Sunday.
The Treasury said, adjusting for that timing shift, spending rose about 6% last month from a year earlier and the monthly deficit widened by roughly 21% on the year. For the first two months of the 2017 fiscal year, the budget deficit totaled $180.84 billion, down about 10% from the $201.11 billion deficit in the same period a year earlier. Because Oct. 1 fell on a Saturday this year, some federal payments for October were instead recorded in September, reducing outlays in the current fiscal year.
More broadly, the federal budget deficit has started to rise after years of marked decline. The deficit totaled $587.33 billion in the 2016 fiscal year that ended Sept. 30, or roughly 3.2% of gross domestic product. That was up from 2.5% of GDP in the prior year. The nonpartisan Congressional Budget Office in August estimated that the deficit would be 3.1% of GDP in the 2017 fiscal year and rise over the next decade as spending growth outpaces revenues, reaching 4.6% of GDP in 2026.
The CBO’s baseline projection assumes no major changes to current law and continued modest economic growth. President-elect Donald Trump and congressional Republicans have signaled that overhauling the tax system will be a priority in the coming year, though the details and potential effects on the deficit and economic growth remain uncertain.
