WASHINGTON – The U.S. budget deficit widened through the first eight months of the fiscal year, highlighting challenges for the Trump administration as it looks to cut taxes and rebalance spending priorities.
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Government spending outpaced revenues by $433 billion from October through May, the Treasury Department said Monday, up from $405 billion during the same period a year earlier. The fiscal year starts in October.
Receipts are up 1%, and outlays have climbed 2%.
Earlier this year, the Congressional Budget Office forecast a 3% rise in receipts this year. Most of that revenue shortfall reflects smaller-than-anticipated tax payments from individuals and corporations, though the cause remains unclear.
The nonpartisan CBO in a report last week speculated that income growth may have been weaker than expected in calendar year 2016 or taxpayers may be shifting income to later years in anticipation of a tax cut.
"The sources of the shortfall will be better understood as data from tax returns start to become available later this year," the CBO said.
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Trump administration officials and analysts have flagged lackluster receipts as potentially compressing the period of time the government has before it runs out of cash. The Treasury Department has been employing cash-conservation measures since mid-March when government debt hit the borrowing limit.
Analysts have estimated those measures will last until October or November. Administration officials have urged lawmakers to raise the debt ceiling before they leave for their summer recess July 28, but the Treasury hasn't said when it expects to run out of room to meet the government's obligations.
Last month, Mr. Trump outlined budget priorities that include cuts to taxes and government safety-net programs. It would balance itself through faster economic growth, the White House said.
Monday's budget figures underscore challenges for the administration and Congress. Spending on Social Security, Medicaid and interest owed on the national debt are all up through the first eight months of the year.
Declining government revenues and long-term costs associated with an aging population are expected to continue pushing up the deficit.
For the month of May, the deficit was $88 billion, up from $53 billion a year earlier.
Write to Jeffrey Sparshott at firstname.lastname@example.org and Kate Davidson at email@example.com
Corrections & Amplifications
This article was corrected at 4:16 p.m. ET because the original version misstated the date as Wednesday in the second and tenth paragraphs.
The Treasury Department released its latest U.S. budget information on Monday. "U.S. Budget Deficit Widens," at 2:32 ET, misstated the date as Wednesday in the second and tenth paragraphs.
(END) Dow Jones Newswires
June 12, 2017 16:30 ET (20:30 GMT)