KEY POINTS

  • First quarter U.S. budget deficit grew to $358 billion, up $39 billion from last year
  • Revenue was up $35 billion to $806 billion
  • Social Security outlays increased by $16 billion as both benefits and the number of recipients increased

The Congressional Budget Office on Wednesday pegged the U.S. budget deficit for the first quarter of 2020 at $358 billion, $39 billion higher than that for the same quarter of 2019.

The government’s fiscal year begins Oct. 1.

Part of the deficit was attributed to payment shifts to Dec. 31 because of the Jan. 1 holiday. The CBO said the shift’s added $20 billion to the total, similar to last year’s total.

Revenue was estimated at $806 billion, up $35 billion from last year, with individual income and payroll taxes accounting to 5% ($29 billion) of the total. Payroll taxes increased by $27 billion while corporate income taxes rose by a net $11 billion, up 21%. Receipts from other sources fell by $5 billion or 8%.

Total outlays were up 7% to $1.16 trillion, an increase of $74 billion. Social Security payments were up by $16 billion, or 6%, because of both an increase in benefits and recipients. Medicare outlays were up $12 billion, or 8%, while Medicaid outlays increased by $5 billion, or 5%.

Military spending increased by $16 billion, up 10%, mainly for procurement. Net payments from Fannie Mae and Freddie Mac were $7 billion lower, totaling just $1 billion to allow the two entities to replenish capital reserves.

The deficit for December was estimated $1 billion higher than December 2018 while receipts totaled $336 billion, up $23 billion, or 7%, from a year earlier largely because of changes in payroll withholding.

The U.S. Treasury reported the actual deficit for November was $209 billion, up $2 billion from the CBO estimate.

The total deficit for 2019 was $984 billion, with the 2017 tax cuts largely to blame for the increasing funding gap.

“Tax reform created just as many loopholes as it claimed to close, shifting a significant amount of the new revenue shortfall onto the public in the form of higher deficits and government borrowing,” said Riley Adams, a certified public accountant and senior financial analyst at Google’s Young and the Invested.

“Tax reform also made it easier for wealthy Americans to shelter their already-considerable income from taxes.”

As of Wednesday, the national debt stood at nearly $23.17 trillion.

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