The federal deficit rose 20 percent due primarily to an increase in spending, the Congressional Budget Office reported Tuesday.
The federal deficit was estimated to be $682 billion in the first 10 months of fiscal year 2018, which is an increase of $116 billion from the last fiscal year. The Congressional Budget Office (CBO) found that it was primarily due to an increase of spending, such as welfare and defense.
Welfare spending, such as Social Security and Medicare, rose about 4 percent. Social Security spending increased by $34 billion due to “increases both in the number of beneficiaries and in the average benefit payment.” Medicare spending increased by $15 billion, primarily because “of increases both in the number of beneficiaries and in the amount and cost of services,” according to the CBO.
Defense spending was increased by $28 billion while Department of Homeland Security (DHS) expenditures rose by 49 percent, predominantly due to natural disaster relief. (RELATED: Report: Sanders’ Universal Medicare Could Top $32 Trillion)
Increased spending was due to the need to pay the “net interest on the public debt” which increased by $48 billion or 19 percent.
Tax revenue also increased, with individual income taxes collected rising 1 percent, from $1.313 trillion to $1.416 trillion. Corporate income tax revenue fell from $232 billion to $167 billion, a decrease of 28 percent. Overall, tax revenue rose 1 percent.
However, the CBO also found that tax revenue for July fell from $232 billion to $225 billion, while spending increased from $275 billion to $301 billion, resulting in a $75 billion budget deficit. The reason for the decreased tax revenue was primarily due to the tax cuts.
The CBO reported that President Donald Trump’s tax cuts may have affected the amount of tax revenue the federal government collects overall in fiscal year 2018 but cautioned that the “timing of those effects is highly uncertain.”
The federal deficit will be $793 billion at the end of the fiscal year, which the CBO says is keeping within their findings from analysis from Trump’s 2019 budget.
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