Economic Report: U.S. runs budget deficit of $209 billion in March, Treasury says

Reuters


The tax law signed by President Donald Trump in December is boosting the U.S.’s budget deficit.

The numbers: The federal government’s budget deficit was $209 billion in March, the Treasury said, up 18% from the same month a year ago. Receipts were $211 billion, down 3%, and spending rose 7% to $420 billion.

What happened: The new tax law continues to widen the deficit, with withholding of individual income and payroll taxes off by 2% in March. In January, the IRS issued new withholding tables based on the law enacted by President Donald Trump in December. Spending was higher in March on Social Security, Medicaid and interest on the public debt. Interest payments were 11% higher, Treasury said.

Big picture: For the first half of the fiscal year, the shortfall is $600 billion, up 14% over the prior fiscal year’s first six months. The Treasury’s latest release comes after the Congressional Budget Office forecast a deficit of $804 billion for the current fiscal year — and a return to trillion-dollar deficits in 2020.

Also see: Tax cuts will lead to sea of red ink, CBO forecasts.

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