Trump’s Tax Cuts Along with Increased Spending Drive Up Deficit by 66% in May

The U.S. government had a $147 billion budget deficit in May, an increase of 66 percent from the same month last year as the ledger took a hit from declining revenue and higher spending, according to Treasury Department data released on Tuesday.

Treasury reported a budget deficit of $88 billion in the same month last year, the department’s monthly budget statement showed.

Economists polled by Reuters had forecast the Treasury recording a $144 billion deficit in May.

When accounting for calendar adjustments, the government’s deficit was $131 billion compared to an adjusted deficit of $88 billion in the same month in the previous year.

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Economists caution that the Trump administration’s corporate and individual tax cuts along with an increase in government spending will drive up the country’s deficit despite a robust economy in which the unemployment rate has fallen to an 18-year low.

The deficit for the fiscal year, which began last October, was $532 billion, compared to a deficit of $433 billion in the same period of fiscal 2017. On an adjusted basis, the gap was $584 billion compared with $473 billion in the prior period.

Unadjusted receipts last month totaled $217 billion, down 10 percent from May 2017, while unadjusted outlays were $364 billion, a rise of 11 percent from the same month a year earlier.

Reporting by Lindsay Dunsmuir; Editing by Andrea Ricci


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