U.S. budget deficit widens 11.8% in its first quarter of fiscal year
The U.S. budget deficit widened to $356.6 billion in the first three months of fiscal 2020 as spending rose more than revenue. This would keep the federal shortfall on pace to exceed $1 trillion by the end of the year.
The gap increased 11.8% from the $318.9 billion in October-December of the previous year, the Treasury Department said on Monday in its monthly budget report. Government outlays increased 6.7%, while receipts rose 4.6%. The U.S. posted a $13.3 billion deficit in December alone compared with $13.5 billion a year earlier.
The three biggest spending categories that increased in the quarter were social security, national defense, and Medicare. Outlays rose to $285 billion for social security, to $187 billion for the military and to $393 billion for Medicare and Medicaid. Those overshadowed corporate income taxes, which jumped by 23% to $65 billion, and individual taxes which were about 3% higher at $385 billion.
The fiscal deficit is set to surpass $1 trillion in fiscal 2020, according to the Congressional Budget Office making it the highest since the financial crisis. As a share of gross domestic product, though, the total deficit will only be about 5%, compared with double that in the recession.