US budget deficit likely widened in March, running ahead of last year

MarketsAssociated Press

The Treasury Department releases federal budget data for March. The report will be issued at 2 p.m. EDT Monday. It had originally been scheduled for release on Friday but was delayed because of computer processing problems.

DEFICIT UP: The Congressional Budget Office is forecasting the March deficit will total $44 billion, up 19 percent from a deficit of $36.9 billion in March 2014.

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RISING IMBALANCE: The CBO estimates that the deficit through the first six months of this budget year is running 4 percent higher than a year ago. For the full budget year, which ends Sept. 30, the CBO is forecasting a deficit of $486 billion. That would be an increase of less than 1 percent from last year's deficit of $483.4 billion.

The 2014 deficit of $483.4 billion was down from $680.2 billion in 2013. Before 2013, the U.S. recorded four consecutive years of deficits topping $1 trillion, reflecting the impact of a severe financial crisis and the worst economic downturn since the Great Depression of the 1930s.

President Barack Obama in February unveiled a budget proposal for 2016, his final full year in office, which seeks authorization from Congress to spend $4 trillion next year. It projects a 2016 deficit of $474 billion.

Obama's spending plan would raise $2 trillion in higher taxes over the next decade from the wealthy, corporations and smokers, while granting tax breaks to low-income and middle-income families. It would boost spending on domestic programs such as increased road construction and a proposal to provide a free community college education to students who qualify.

Republicans have attacked Obama's proposals for the tax increases and the lack of a balanced budget. Last month, they pushed through the House and Senate broadly similar measures that claim to erase the deficit entirely over the next decade.

The proposals would trim deficits by $5 trillion without raising taxes but with sharp reductions in health care and other government benefit programs.

Passage of the GOP measures sets the stage for months of wrangling with the administration over a final spending plan for the budget year that begins Oct. 1.

Republican leaders have said they do not want a repeat of the partial government shutdown that occurred in October 2013 because of a failure to resolve various budget disputes, but t is difficult to see how the wide differences in spending and tax issues will be resolved.