The U.S. budget deficit rose sharply to $77 billion in July, with a big drop in corporate tax payments accounting for much of the shortfall.
The Treasury Department reported that receipts increased 1% last month to $225 billion and outlays jumped 10% to $302 billion. The $77 billion gap represented a 79% increase over July 2017 and was in line with economists’ expectations and $2 billion above the Congressional Budget Office’s estimate.
The July report reflected the Republican tax cuts, the big boost in spending Congress approved earlier this year for domestic and military programs, and the rising costs of financing the debt.
The increased government spending and tax cuts are “keeping the country on track to record its biggest annual deficit in six years,” The Associated Press said.
In July, revenue from corporate income taxes fell 34% to $4.3 billion while interest payments on the public debt jumped by 41%.
For the first 10 months of the 2018 fiscal year, the deficit totaled $684 billion, up 20.8% from the year-ago period. Revenues are up only 1% while spending is up 4.4%
Congressional budget analysts predict the deficit for the full year will be about 19% bigger than last year’s shortfall and the CBO expects trillion-dollar deficits will return in 2020.