Sept. 13 (Bloomberg) -- The U.S. government’s budget deficit widened in August, primarily reflecting a calendar- related jump in spending compared with the same month last year.
The gap climbed to $134.2 billion last month, exceeding the August 2010 shortfall of $90.5 billion, according to the Treasury Department’s monthly budget statement issued in Washington. For the fiscal year to date, the deficit increased to $1.23 trillion, less than at the same point in 2010.
Improved income-tax collections and efforts to cut spending signal the deficit will stop climbing, according to government and Wall Street analysts. The drive to limit debt prompted President Obama to send a $447 billion job-growth package to Congress this week that he stressed would be paid for with offsetting reductions in outlays and increases in tax revenue over the next decade.
“The red ink has maxed out for this recession,” Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said before today’s report. Just the same, “austerity is in, and stimulus is out,” Rupkey said.
Congress has assigned a special 12-member panel the task of finding as much as $1.5 trillion in additional savings under the terms of the debt-ceiling deal reached in early August. The committee’s plan is to be submitted to Congress with a vote before the end of the year.
The White House Office of Management and Budget and the non-partisan Congressional Budget Office both now estimate the budget deficit will total $1.3 trillion in the year ending Sept. 30, about $10 billion less than in 2010. The OMB and CBO lowered estimates for the following fiscal year as well.
Regarding the August budget deficit, the CBO projected a shortfall of $132 billion in a statement issued Sept. 8. The higher monthly gap came “because Aug. 1, 2010, fell on a weekend and certain payments ordinarily made on the first of the month were instead made in July of that year,” the CBO said. The median forecast of 29 economists in a Bloomberg News survey was also $132 billion.
Spending jumped 19 percent in August from the same month a year earlier to $303.4 billion, and revenue climbed 3.2 percent to $169.3 billion, according to the Treasury.
Individual income tax receipts have climbed 23 percent in the fiscal year to date, and corporate tax receipts decreased 0.2 percent.
The deficit totaled $1.26 trillion at this point last year and reached $1.29 trillion for all of fiscal 2010.
--Editors: Carlos Torres, Paul Badertscher
To contact the reporter on this story: Vincent Del Giudice in Washington at vdelgiudicebloomberg.net
To contact the editor responsible for this story: Chris Wellisz at firstname.lastname@example.org
© Copyright 2015 Bloomberg News. All rights reserved.