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- The US budget deficit hit $234 billion in the month of February, up 8.7% compared to the same month last year.
- The February budget deficit was also the highest one-month deficit on record, eclipsing the previous record set in 2012.
- The deficit is growing as the GOP tax law slows revenue intake and the bipartisan budget deal drives up spending.
The US posted a record budget deficit in the month of February, according to a new report form the Treasury Department.
The budget deficit for February came in at $234 billion, according to the Treasury, higher than the previous monthly record of $231.7 billion set in 2012. The deficit was also 8.7% higher than the $215.2 billion deficit posted in February 2018.
The budget deficit measures the shortfall of government revenues compared to what the government spends. Recent legislative changes have driven the deficit up to its highest levels since the financial crisis.
The deficit for the first five months of the government’s 2019 fiscal year, which runs from October 2018 through October 2019, hit $544.2 billion – up 40% from the first five months of fiscal year 2018.
The growing deficit has been fueled by two big factors. First, President Donald Trump’s and the GOP’s tax reform law – named the Tax Cuts and Jobs Act (TCJA) – has caused revenues to slide. According to the Treasury, revenue for the first five months of fiscal year 2019 is down a little less than 1% compared to the same period the year before.
Second, spending is soaring due to the bipartisan budget compromise from early 2018 and long-term programs. Spending for the start of fiscal year 2019 is up 9% compared to the same time period last fiscal year.
The news comes as concerns about the debt have piled up in recent months. The budget deficit for the full 2018 fiscal year hit $779 billion, the highest since 2012. The US also issued just over $1.3 trillion in new debt during the 2018 calendar year, the most for any calendar year since 2010.
Based on projections from the Congressional Budget Office, it won’t get any better with the deficit expected to top $1 trillion by fiscal year 2022. Even the president’s own budget estimated that the deficit will top $1 trillion next fiscal year.