The budget deficit in the U.S. widened over the first six months of fiscal 2015 as spending on Social Security and health services increased, a government report showed.
Spending exceeded revenue by $439.5 billion from October through March, compared with a $413.3 billion deficit in the same period the prior year, Treasury Department figures released Monday showed. The shortfall in March was bigger than economists projected.
A stronger economy may help narrow the deficit after a weak first quarter. The U.S. is on pace to post a $486 billion shortfall in the full fiscal year, or 2.7 percent of the economy, compared with 2.8 percent last year, the Congressional Budget Office predicted last month.
“Revenue growth may increase further in the second quarter as the economy picks up,” said Gennadiy Goldberg, U.S. strategist at TD Securities LLC in New York.
In the first half of the fiscal year, revenue grew 7.3 percent to $1.4 trillion, the highest since at least 1998, boosted by higher individual and corporate tax receipts. Outlays increased 7.1 percent as spending on Medicare, Medicaid and other health services rose 11.8 percent, the report showed. The Social Security Administration spent 4 percent more.
For March, the deficit increased $16 billion to $52.9 billion from a year earlier. Payments to the Treasury from Fannie Mae and Freddie Mac were $15 billion lower than same month last year, largely because financial institutions made fewer settlement payments to the government-sponsored enterprises than they did last year, the Congressional Budget Office said in an April 8 report.
Revenues increased 8.5 percent in March, while spending rose 13.6 percent, the Treasury said.