February’s shortfall helped push the deficit for the first five months of the government’s fiscal year to $544.2 billion, up almost 40% from the same period the previous year, the Treasury Department said in its monthly budget report March 22. The release was delayed a week by the government shutdown earlier this year.
Receipts dipped less than 1% to $1.3 trillion in the October-February period from the previous year, while spending accelerated 9% to $1.8 trillion.
The fiscal shortfall is widening after President Donald Trump’s $1.5 trillion tax-cuts package that’s weighing on receipts and raising concerns about the national debt load, which topped a record $22 trillion last month.
Federal Reserve Chairman Jerome Powell reiterated his concern over the government deficit in a press conference March 20, saying that the nation’s growing debt pile needs to be addressed. At the same time, there’s a shift among some economists — led by proponents of Modern Monetary Theory — on the dangers of a growing deficit, with low inflation and cheap borrowing costs suggesting there’s room for additional spending.
The Treasury data show tax receipts declined for corporations and individuals in the five-month period, while revenue from customs duties almost doubled, boosted by income from tariffs imposed by the Trump administration.