The U.S. government’s budget deficit increased by $169 billion to $1.07 trillion in the first 11 months of this budget year as spending grew faster than tax collections, according to the Associated Press.
The Treasury Department reported Thursday, Sept. 12, that the deficit with just one month left in the budget year is up 18.8% over the same period a year ago.
Budget experts project a surplus for September, which would push the total 2019 deficit down slightly below the $1 trillion mark. The Congressional Budget Office is forecasting a deficit this year of $960 billion, compared to a 2018 deficit of $779 billion.
“Higher spending on the military, rising interest expenses on government debt and weak revenues early in the fiscal year combined to push the deficit up 19% from October through August, compared with the same period a year earlier. Government spending climbed 7%, to $4.1 trillion, outpacing higher federal tax receipts, which grew 3%, to $3.1 trillion,” Wall Street Journal reported.
In addition, Social Security and Medicare payments are surging as millions of baby boomers retire. Added to the increased spending is the impact of the $1.5 trillion tax cut President Donald Trump pushed through Congress in 2017, reducing individual and corporate tax rates.
Individual tax revenues have risen by 2% in the first 11 months of this year compared to the same period in 2018 while corporate tax revenues are down 2%.
Tariffs are up $28 billion or 73% over last year, reflecting the higher tariffs Trump has imposed on China and other nations as part of his get-tough trade battles, according to The Associated Press.
The administration was considering some financing options that could reduce borrowing costs, including introducing a 50-year bond and lengthening the maturity of Treasury borrowing, according to Treasury Secretary Steven Mnuchin.
President Trump who often criticizes the Fed for not reducing the rates, argued on Wednesday that further short-term rate cuts would also help lower government borrowing costs, according to The Wall Street Journal.
In his tweet in response to a rate cut by the European Central Bank on Thursday, the president again blamed the Fed for not taking action “the Fed sits, and sits, and sits.”
“They get paid to borrow money, while we are paying interest!” he added.
European Central Bank, acting quickly, Cuts Rates 10 Basis Points. They are trying, and succeeding, in depreciating the Euro against the VERY strong Dollar, hurting U.S. exports…. And the Fed sits, and sits, and sits. They get paid to borrow money, while we are paying interest!
— Donald J. Trump (@realDonaldTrump) September 12, 2019
Include reporting from The Associate Press