The U.S. government’s budget deficit widened 5.3 percent in March, as outlays increased on recurring benefit payments and a subsidy re-estimate for the Troubled Asset Relief Program.
The shortfall expanded to $198.2 billion from $188.2 billion a year earlier, the Treasury Department said today. Economists projected a $196 billion gap, according to the median estimate in a Bloomberg News survey.
“The government budget deficit is still bursting at the seams with little chance that either side of the aisle is willing to shake hands and get a deal done,” Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said before the report.‘ ‘The economy is growing again but we can’t grow our way out of these trillion dollar deficits.”
Republicans rejected President Barack Obama’s $3.8 trillion election-year budget plan, saying it didn’t go far enough to reduce the deficit or boost economic growth. Obama said the House Republican budget, written by Wisconsin Representative Paul Ryan, represented a “doubling down” on “trickle-down” economic policies that have depressed middle-class incomes while the wealthy have gained.
The House on March 29 approved Ryan’s $3.5 trillion fiscal 2013 budget by a vote of 228-191, with no Democrats voting for it. Ryan says the plan would overhaul Medicare and cut food stamps, Pell grants and other programs for the poor while boosting defense spending and reducing taxes on high earners, in a bid to erase deficits exceeding $1 trillion.
The deficit in March was “impacted by several timing-related transactions,” the Treasury said. These include “$30 billion of monthly recurring benefit payments” and “a net subsidy re-estimate for TARP totaling $20 billion,” Treasury said in a statement.
Before today’s report, estimates of the March budget gap ranged from $210 billion to $180 billion, in a survey of 24 economists.
In the first six months of the fiscal year that began in October, the budget deficit was $779 billion compared with $829.4 billion in the same period last year.
Spending rose by 8.9 percent in March from a year earlier to $369.4 billion, while revenue gained 13.5 percent from a year earlier to $171.2 billion.
Individual income tax receipts in the first six months of this fiscal year rose 1.8 percent to $484.1 billion. Corporate income tax receipts climbed 53.5 percent to $84.5 billion in the same time period.
The non-partisan Congressional Budget Office estimated last week the March budget deficit would reach $196 billion.
The CBO said in a report dated April 6 that outlays were $29 billion higher in March than they were in the same month last year, mostly because about $31 billion in payments that would ordinarily be made in April were instead made last month.
“In addition, revisions to the estimated cost of several credit programs -- mostly the Troubled Asset Relief Program -- added $7 billion to spending this March compared with outlays last March,” the CBO said.