US budget deficit jumps in May as spending outpaces revenue
WASHINGTON — The U.S. budget deficit rose to $88.4 billion in May from $53 billion a year earlier, as government spending in areas such as Medicaid and defence rose at a faster pace than revenue.
Receipts from individual and corporate taxes rose 7 per cent last month from May 2016 to $240 billion, the Treasury Department said Monday. Meanwhile, spending leapt 19 per cent to $329 billion.
Taxe revenue is rising, but at a slower pace than in previous years and by less than the Congressional Budget Office has forecast. That partly reflects slower growth in the economy and hiring. With the unemployment rate low, fewer workers are available to take open jobs.
That is widening the deficit at the same time the Trump administration has proposed steep tax cuts. The administration has also pushed for sharp reductions in spending, but Trump’s proposed budget depends on annual growth of 3 per cent to balance over time. The economy expanded 1.6 per cent last year and hasn’t grown 3 per cent since 2005.