The U.S. budget deficit rose to $88.4 billion in May from $53 billion a year earlier, as government spending in areas such as Medicaid and defense rose at a faster pace than revenue.
Receipts from individual and corporate taxes rose 7 percent last month from May 2016 to $240 billion, the Treasury Department said Monday. Meanwhile, spending leapt 19 percent to $329 billion.
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Tax revenue is rising, but at a slower pace than in previous years and by less than the Congressional Budget Office has forecast. That partly reflects slower growth in the economy and hiring. With the unemployment rate low, fewer workers are available to take open jobs.
That is widening the deficit at the same time the Trump administration has proposed steep tax cuts. The administration has also pushed for sharp reductions in spending, but Trump's proposed budget depends on annual growth of 3 percent to balance over time. The economy expanded 1.6 percent last year and hasn't grown 3 percent since 2005.
Meanwhile, the deficit has increased to $433 billion in the first eight months of this budget year from $405 billion last year.
Medicaid costs have risen 3 percent, partly because the Obama administration's Affordable Care Act has brought more people in the program. Defense spending jumped 17 percent in May but has been flat this year.
The government has also spent $35 billion more this year on interest on its debt, a gain of 14 percent, Treasury said. That is mostly because inflation has picked up a bit since last summer, which pushes up interest payments on the government's inflation-adjusted bonds, known as TIPS.
Also Monday, a Washington think tank projected that despite the slowdown in revenues, the government will have enough cash to pay its bills until October or November. The Bipartisan Policy Center estimate is more optimistic than Treasury Secretary Steven Mnuchin, who has been warning Congress that it must act before it leaves on its August recess.
The think tank says that revenue results from this month's quarterly tax payments are likely to clarify the deadline, but for now Mnuchin has sufficient maneuvering room — by using accounting steps known as "extraordinary measures" — to keep the government solvent into the fall. The policy center says a big Oct. 2 payment into the military retirement trust fund could trigger default.
The Congressional Budget Office has projected that the deficit for the full budget year, which ends on Sept. 30, will decline 4.6 percent to $559 billion. That would compare to a 2016 deficit of $585.6 billion.
The CBO's deficit estimate is based on current law remaining unchanged. President Donald Trump has called for a program of tax cuts for individuals and businesses, and increased government spending in such areas as the military and repairing the nation's aging infrastructure.
Under Trump's proposal, released last month, the deficit would increase this year to $602.5 billion.
Associated Press Writer Andrew Taylor contributed to this report.