According to the US budget deficit shot up more than 23 percent in the first three quarters of the fiscal year when compared against the same nine-month period from a year ago. Specifically, the US budget deficit grew to $747.1 billion, indeed significantly higher than the $607 billion deficit last year (registered between October and June). In that period, Federal spending increased by $3.36 trillion and revenue increased to $2.61 trillion. At least these last two were new record highs.
Released on Thursday, the numbers come from the monthly Treasury report and they tell quite a discomforting story about the US budget and how the United States federal government is starting to run out of credit.
As a matter of fact, the United States has not been able to hold any borrowing power since March. That was when the congressionally-mandated debt ceiling initiated and, as a result, independent analysts now suggest that the government could potentially run out of money as early as September—of this year—unless Congress can reach an agreement to permit more borrowing.
Now, there are many factors that drive the deficit increase. For one, we have the $1.5 trillion tax cuts; yes, the very same corporate tax breaks signed by US President Donald Trump in 2017. And the very same tax cuts singed in conjunction with a huge spending package.
Incidentally, the Trump administration now predicts the budget deficit is likely to surpass $1 trillion for the whole of this fiscal year. That fiscal year ends September 30, just in time to run out of money, as per those aforementioned independent analysts. This is up from the $779 billion deficit listed last year.
These numbers are much higher than what the nonpartisan Congressional Budget Office had forecast. The CBO had anticipated the annual deficit, this year, will reach only $896 billion; and we will not cross the $1 trillion mark until 2022.
Releasing these new deficit figures come at a time when both the Republicans and Democrats are working to hash out a better budget deal for next year. Obviously, the two sides cannot agree on how much money they can spend on programs that fall outside of Social Security and Medicare. Regardless of the agreement, the White House budget forecast lists deficits of more than $1 trillion for at least the next four consecutive years.