The United States government continues to run a budget deficit near a seven-and-a-half year low ahead of an expected increase as spending measures for 2016 kick in.
The gap between government spending and revenue was $193 billion in February, the Treasury Department said Thursday, up only slightly from the $192 billion deficit a year ago. Spending typically exceeds revenue in February as tax refunds are mailed.
Over the 12-month period ended in February, the deficit held fairly steady at $405 billion, or around 2.2% of GDP. A year earlier, the 12-month deficit was $495 billion, or 2.8% of GDP.
As the Wall Street Journal reports, year-to-date government revenue has been boosted by rising individual income-tax receipts, as well as a one-time payment of $19 billion from the Federal Reserve that Congress enacted last year to pay for a highway-funding measure.
But both the Obama administration and the Congressional Budget Office are forecasting deficits for the full year that will be significantly higher than last year’s $439.1 billion, the lowest annual deficit in eight years.
The CBO predicts the deficit will increase by 24% to $544 billion this year, while the administration is forecasting a deficit of $616 billion.
In December, Congress approved a budget package that increased spending by $1.14 trillion this year and will provide $680 billion in tax cuts over the coming decade.
For the current 2016 budget year, which began on Oct. 1, the government has collected $1.25 trillion in revenue, an increase of 5.3% from a year ago. Government spending has totaled $1.6 trillion, up 1.9% from a year ago.
For February, total spending for the month was up 9%, at $362 billion, Treasury said, with spending rising for interest payments on the public debt; Medicare and Medicaid benefits; and veterans’ programs, among other budget areas.
Tax receipts rose 21% to $169 billion in February, reflecting in part the extra business day in the month.