US deficit grows to $666 billion

World
Europe

The US budget deficit grew to 666 billion US dollars in just-ended fiscal year 2017, according to official data released Friday, after lawmakers took a step toward enacting 1.5 trillion US dollars in tax cuts.

The deficit climbed 13.6 percent from a year ago, or by 80 billion US dollars, with much of the nearly 4 trillion US dollars the US government spent last year associated with caring for the country's ageing population.

The deficit now accounts for 3.5 percent of gross domestic product (GDP), up from 3.2 percent 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 US Treasury Department said.

But the deficit came in 36 billion US dollars 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 percent to 3.98 trillion US dollars while revenue fell 0.9 percent to 3.32 trillion US dollars, while the total federal debt rose to 14.67 trillion US dollars.

Higher outlays for social security, Medicare (a government medical program 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 percent to 569 billion US dollars, and 45 percent in education to 112 billion US dollars.

"Higher spending by the Federal Emergency Management Administration for hurricane relief and recovery also contributed to the increase," it added.

Source(s): AFP