Budget Deficit in U.S. Widened in November on Spending Shift
The U.S. government’s budget deficit widened in November, reflecting a jump in spending that normally takes place a month later.
The shortfall grew to $172.1 billion from $137.3 billion in November 2011, the Treasury Department said today in Washington. The gap was in line with the $171 billion median estimate in a Bloomberg survey of economists. Since Dec. 1 fell on a Saturday, payments made that day were pushed forward into last month.
President Barack Obama and Republican lawmakers are seeking ways to avoid the more than $600 billion in tax increases and spending cuts scheduled to take effect on Jan. 1. U.S. House Speaker John Boehner said today that there remained “serious differences” between the two parties.
“We are likely to have a much better performance on the deficit this year than we had last year,” Millan Mulraine, the director of U.S. rates research and strategy for TD Securities in New York, said in a telephone interview before the report. “Even if we avoid the fiscal cliff, the expenditure cuts and revenue intake that will replace it will likely lower the deficit.”
The shortfall hit a record of $1.42 trillion in 2009 and declined to $1.09 trillion in fiscal year 2012. The gap was $120 billion in October, the first month of the government’s fiscal year.
Today’s report showed revenue increased 6.1 percent in November to $161.7 billion, compared with $152.4 billion in the same month a year earlier. Spending jumped 15.2 percent to $333.8 billion from $289.7 billion, the Treasury said.
The nonpartisan Congressional Budget Office estimated on Dec. 7 the November deficit would be $172 billion. The Washington-based agency said November spending increased because Dec. 1 fell on a weekend, shifting some payments from December to November. If not for the shift, the November shortfall would have been $1 billion more than the same month last year, the CBO said.
Individual income tax receipts for the first two months of the fiscal year rose to $177.1 billion from $157.4 billion in the same period last year. Corporate income tax receipts rose to $4.84 billion from $4.1 billion.
Estimates of the November budget gap in the Bloomberg survey of 26 economists ranged from $113 billion to $175 billion.
Lowering the budget deficit has been the key issue of political debate since Obama won re-election on Nov. 6.
Boehner, who represents Republicans in the negotiations with Obama, announced a $2.2 trillion proposal Dec. 3. That called for $800 billion in new revenue through a rate-lowering, base-broadening overhaul of the U.S. tax code. Boehner would reduce entitlement spending by $900 billion and other spending by $300 billion.
Obama has reduced his demand for tax increases to $1.4 trillion from $1.6 trillion.
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