WASHINGTON—The U.S. budget deficit expanded during the first half of the fiscal year as spending rose faster than receipts, marking a turnaround after six years of an improving fiscal picture.
The government ran a $ 461.04 billion deficit from October to March, the Treasury said Tuesday in its monthly report. That was up almost 5% from the first half of the 2015 fiscal year, which runs from October through September.
In March, the deficit was $ 108.04 billion, up from the $ 52.92 billion gap during the same month a year earlier, though much of the single-month difference was caused by calendar quirks.
- U.S. Budget Deficit to Widen for First Time Since 2009 (Jan. 19)
- Debt, Growth Concerns Rain on Deficit Parade (Oct. 18, 2015)
The U.S. budget deficit exploded to more than $ 1.4 trillion, about 9.8% of gross domestic product, in 2009 as the U.S. shuddered through the recession. The figure has fallen steadily since, reaching it is lowest level since 2007 last year. At 2.5% of gross domestic product, the deficit was below the 2.8% average over the prior 50 years.
Now, it is set to start expanding again. The Congressional Budget Office is projecting a $ 534 billion deficit for the current fiscal year, a roughly 22% increase from a year earlier.
If existing laws remain unchanged, the deficit will continue to rise for the next decade as spending—notably on Social Security, Medicare and interest—outpaces revenue growth. By 2026, the deficit is expected to climb to 4.9% of GDP, the CBO projects.
During the first half of fiscal 2016, receipts climbed 4% while outlays rose 4.2% compared with the same six-month stretch a year earlier. The Treasury is collecting more individual taxes this year as employment and wages rise. But corporate tax receipts are down, likely reflecting narrowing profits.
Spending on big-ticket programs is rising. Medicare outlays are up 6% and Social Security is up 3%, the Treasury said. Interest paid on the public debt has climbed 18% to $ 189 billion so far this year.
Write to Jeffrey Sparshott at [email protected]