The U.S. Capitol (Matt McClain/The Washington Post)
The U.S. government’s budget deficit is widening sharply this year, the Congressional Budget Office said Thursday in a report that could raise new questions about the tax cut package Republicans are trying to push on Capitol Hill.
CBO said the deficit would widen to $693 billion for the fiscal year that ends September 30. That is roughly 3.6 percent of gross domestic product, and would mark the largest budget deficit since 2013. In January, CBO projected the deficit would be $585 billion, of 2.9 percent of GDP.
The primary reason for the larger deficit is that the government is collecting less money in tax receipts than they expected.
The lagging receipts are likely one reason CBO also projected Thursday that the Treasury Department could run out of money to continue paying the government’s bill by early to mid-October if the debt ceiling — which is set by Congress — isn’t increased by then.
Treasury Secretary Steven Mnuchin, asked at a press conference Thursday about Congress acting on the debt ceiling, said of Congress, “for the benefit of everybody, the sooner that they do this, the better.”
Because the government runs a budget deficit — it spends more money than it brings in through revenue — the Treasury Department borrows money by issuing debt to cover the difference. But it can only issue debt up to a certain level set by Congress. Treasury Secretary Steven Mnuchin has said his agency has enough money to pay the bills through September. CBO’s estimate was slightly different, though it warned that Treasury had a $81 billion payment to military pension funds on Oct. 3 that could be difficult if cash reserves run low.
CBO said the reason the deficit grew more rapidly than expected this year is because tax receipts are only expected to …read more