WASHINGTON (MaceNews) – The U.S budget deficit in May of $207.8 billion at first glance is a record for any May and on second glance, after figuring in $55 billion in benefit payments shifted into the month because June 1 was a Saturday, it becomes a less scary$159 billion.
The Treasury Department reported Wednesday that for the first eight months of the fiscal year, the total deficit through May was $738.6 billion, 39% higher than the previous year.
The total for all of fiscal 2019 will be around $896 billion and should fall short of $1 trillion a year for 2020 and 2021. Then the trillion-or-more-a-year deficits begin, the Congressional Budget Office estimates. The White House is more pessimistic or realistic, depending on the point of view, seeing the deficit hitting $1 trillion as soon as this current year.
For additional context, the CBO sees deficits over the 2020-2019 period averaging 4.3% of GDP, which it points out is “well above” the 2.9% average over the past 50 years.
For the latest month Treasury is reporting, total budget receipts were $232 billion and outlays were $440 billion, and after adjustments were $226 billion and $385 billion respectively. For the fiscal year so far spending is $3.013 trillion, up 9.3%, while receipts are $2.27 trillion or 2.1%.
One of the many reasons the government is continually spending more than it collects in taxes and other revenue is the growing interest on the public debt, still relatively modest because of low interest rates. In May the debt service was $48 billion, 34% more that the same month last year. For the eight months of the fiscal year through May the interest was $354 billion, 11% more than the year before, several times higher than the consumer inflation rate.
May’s individual income taxes brought in $202 billion, an increase of 9% over last year’s May despite the 2017 tax cut, mostly because more people are working, bulking up withholding. Corporate taxes were $6 billion, 7% less than the 2018 fiscal year.
The tariffs paid by U.S. importers were $5 billion in May and for the fiscal year through May $46 billion, 80% more than the previous year.