US budget deficit totals $107.1 billion in August

The federal government recorded a deficit of USD 107.1 billion in August, slightly lower than the July deficit.

PTI| Last Updated: Sep 14, 2016, 01:37 AM IST
US budget deficit totals $107.1 billion in August

Washington: The federal government recorded a deficit of USD 107.1 billion in August, slightly lower than the July deficit.

But the imbalance through 11 months of this budget year is up sharply from a year ago, reflecting higher spending and lower-than-expected tax revenues.

The Treasury Department said today that the deficit, with just one month to go in the budget year, totals USD 620.8 billion, up 17.1 per cent from the same period a year ago.

The August deficit was slightly lower than the USD 112.8 billion imbalance in July.

The Congressional Budget Office last month revised its estimate for the 2016 deficit up sharply to show an imbalance of USD 590 billion.

That was up from a March projection of USD 534 billion.

The budget year ends on September 30 and September is expected to show a surplus.

The CBO estimate for the 2016 deficit is close to the USD 599.9 billion deficit that the Obama administration estimated when it released its mid-session budget review in July.

Both projections are about one-third higher d but it is about one-third higher than the actual deficit in 2015 of USD 439.1 billion, the lowest deficit in eight years.

Through the first 11 months of this budget year, revenues total USD 2.91 trillion, a modest 0.9 per cent higher than the same period in 2015, while outlays total USD 3.53 trillion, up 3.4 percent from the same period in 2015.

The CBO sees steadily rising deficits over the next decade, reflecting higher Social Security and Medicare payments as baby boomers retire.

But because CBO in its latest report projected that economic growth will be slower, it expects that interest rates over the next decade will remain lower as well.

That means the government will have to spend less to finance the debt.

CBO projected that deficits over the next decade will be USD 712 billion lower than it projected in March.

That would still add up to USD 8.57 trillion being added to the national debt over that period. The debt at present stands at USD 19.4 trillion.