The federal deficit is projected to have risen 12 percent in the first three months of the fiscal year, according to Wednesday projections from the Congressional Budget Office (CBO).
The deficit in the first quarter of the 2020 fiscal year, which began in October, amounted to $358 billion, according to the CBO projection, an increase of $39 billion over the same period last year.
Spending, or outlays, increased by 7 percent, outpacing the 5 percent increase in revenues. A moratorium on a health insurance tax, which was made permanent in December, accounted for the majority of a $10 billion drop in excise tax revenues. Spending on Medicare, Medicaid, Social Security and Defense all spiked by a range of 5 to 10 percent, with the largest increase ($16 billion, or 10 percent) going to defense.
All in all, the deficit is expected to surpass $1 trillion in 2020 for the first time since the four-year period following the Great Recession in 2009. CBO has called the current deficit path “unsustainable.”
The deficit has spiked dramatically since President Trump took office, as Congress struck bipartisan deals to increase spending and extend tax breaks, and the GOP passed a deficit-financed tax cut.
The Treasury Department is expected to release official deficit figures next week.
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