The U.S. budget deficit widened to US$319 billion in the first three months of the government’s fiscal year as spending increased and revenue was little changed, according to the Treasury Department.
The shortfall grew by 42 per cent between the October to December period, compared with the same three months the previous year, according to the latest Treasury monthly budget report released on Wednesday. Receipts climbed by 0.2 per cent to US$771.2 billion, while spending was up 9.6 per cent to US$1.1 trillion.
The latest data will likely fan concerns over America’s growing national debt, which topped US$22 trillion this week. The fiscal deficit is projected to keep growing and surpass US$1 trillion by 2022, according to the Congressional Budget Office, fueled in part by President Donald Trump’s US$1.5 trillion tax-cut package and government spending increases. The White House has said the measures will boost U.S. economic growth and create jobs.
Tariffs imposed by the Trump administration on Chinese goods and other imports including steel and aluminum are boosting revenue. Customs receipts nearly doubled to US$17.8 billion in the first quarter from a year earlier, according to Treasury. The trend is “largely because of new tariffs imposed by administration in the past year,” according to a separate budget analysis by the non-partisan Congressional Budget Office released last month.
The growing budget deficit is concerning for fiscal hawks, who say it risks economic growth and U.S. credit quality. Net interest payments on the national debt jumped 19 per cent to US$99.6 billion in the first quarter of fiscal 2019.
The government ran a deficit of US$13.5 billion in December, compared with a US$23.2 billion-gap the same month a year prior, according to Treasury. The department’s report was originally scheduled for release in January but was delayed by the partial government shutdown.