US deficit grows to $666 billion as lawmakers eye tax cuts

WASHINGTON: The US budget deficit grew to $666 billion in just-ended fiscal year 2017, according to official data released on Friday, after lawmakers took a step toward enacting $1.5 trillion in tax cuts.
The deficit climbed 13.6 per cent from a year ago, or by $80 billion, with much of the nearly $4 trillion the US government spent last year associated with caring for the country’s ageing population.
The deficit now accounts for 3.5 per cent of gross domestic product (GDP), up from 3.2 per cent in 2016.
“Growth in spending outpaced growth in tax receipts for the second year in a row as a result of historically subpar economic growth,” the Treasury Department said.
But the deficit came in $36 billion lower than forecast halfway through the fiscal year, which ended September 30, officials said.
“Today’s budget results underscore the importance of achieving robust and sustained economic growth.
Through a combination of tax reform and regulatory relief, this country can return to higher levels of GDP growth, helping to erase our fiscal deficit,” said Treasury Secretary Steven Mnuchin.
“These numbers should serve as a smoke alarm for Washington, a reminder that we need to grow our economy again and get our fiscal house in order. We can do that through smart spending restraint, tax reform, and cutting red tape,” added Mick Mulvaney, Director of the Office of Management and Budget.
Spending grew 3.3 per cent to $3.98 trillion while revenue fell 0.9 per cent to $3.32 trillion, while the total federal debt rose to $14.67 trillion.
Higher outlays for social security, Medicare (a government medical programme for the elderly), and Medicaid (for the low-income and disabled Americans) as well as interest on the public debt all contributed to the rise in outlays.
Spending on the military rose one per cent to $569 billion, and 45 per cent in education to $112 billion.
“Higher spending by the Federal Emergency Management Administration for hurricane relief and recovery also contributed to the increase,” it added. — AFP