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13 Aug 2018
 |
US
(The Total Investment & Insurance Solutions)
The federal government racked up a $76.9 billion deficit in July, with
increased government spending and tax cuts keeping the country on track to
record its biggest annual deficit in six years.
The Treasury Department reported Friday that
in the first 10 months of this budget year, the deficit totaled $684 billion,
up 20.8 percent from the same period last year. The Total Investment & Insurance Solutions
Revenues are up only 1 percent this year, the
increase held back by a big drop in corporate tax payments. Spending is up 4.4
percent, reflecting a big boost Congress approved earlier this year for
domestic and military programs and the rising costs of financing the debt.
The Trump administration last month sharply
revised upward its deficit estimates, projecting annual deficits will once
again top $1 trillion next year.
For the current budget year, which ends Sept.
30, the administration is now projecting a deficit of $890 billion. That would
be up 33.7 percent from last year's deficit of $665.8 billion. The Total Investment & Insurance
Solutions
The administration's July estimates project
that the deficit will top $1 trillion in 2019, climbing to $1.1 trillion that
year, and remaining above $1 trillion for three years. The Total Investment & Insurance Solutions
The only other period when the federal
government ran deficits above $1 trillion was for four years from 2009 through
2011. That's when the Obama administration was using tax cuts and increased
spending, along with support for the banking system, to combat the 2008
financial crisis and Great Recession, the worst economic downturn since the
Great Depression of the 1930s.
President Donald Trump succeeded in getting
Congress in December to pass a tax cut of $1.5 trillion over the next decade,
fulfilling a longtime Republican goal of cutting the corporate tax rate. It
reduced the rate from 35 to 21 percent although most corporations had used
various methods to reduce the actual rate they paid under the previous law to
below the 35 percent figure.
Friday's monthly budget report showed that
over the past 10 months, corporate taxes are down 20 percent — $55 billion —
from the same period a year ago.
The December tax legislation also cut
individual taxes although Democrats have said most of that benefit will be seen
by the wealthiest taxpayers. So far this year, individual tax receipts are up 2
percent as a result of more people working as unemployment continues to fall.
Through the first 10 months of this year,
revenues have totaled $2.77 trillion while spending has totaled $3.45 trillion,
both record amounts for the first 10 months of a budget year. The Total Investment & Insurance
Solutions
The increases in spending for the 10-month
period included $36 billion more for Social Security and $26 billion more for
Medicare, the government's two biggest benefit programs, reflecting rising
costs as the baby boomer generation retires. Defense spending was up $27
billion.
Interest on the national debt was up $50
billion. Half that amount went to the higher payments Treasury is making on
securities that guard against increases in inflation, and the other half
reflecting rising interest rates and a growing amount of debt that must be
financed. The Total Investment &
Insurance Solutions
The $76.9 billion deficit for the month of
July compared to a deficit of $42.9 billion in July 2017. The government has
run a deficit in July in 62 of the past 64 years.The Total Investment & Insurance Solutions
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