The federal deficit in the first seven months of fiscal 2019 jumped 38 percent compared to the same period last year, the nonpartisan Congressional Budget Office (CBO) said Tuesday.
The deficit ballooned to $531 billion from the beginning of October to the end of April, well above the previous year's $385 billion mark.
But the comparison with 2018 was somewhat inflated, CBO said, due to differences in payments and outlays; without them, the deficit would have been $486 billion.
Expenditures rose by $178 billion during the first seven months of the fiscal year, driven by both increased mandatory spending and a bipartisan agreement to increase discretionary spending. Higher interest rates also contributed.
“Outlays for net interest on the public debt increased by $27 billion (or 13 percent) because interest rates on short-term debt are substantially higher now than they were during the same period in 2018 and because the amount of federal debt is larger than it was a year ago," the CBO said in its report.
Meanwhile, revenues were up only $34 billion, due in part to the 2017 GOP tax law.
“Most of that shortfall stems from lower-than-anticipated withholding of individual income and payroll taxes in December 2018 and January 2019,” CBO said.
A recent CBO analysis found that if current spending and tax policies remain in place, the nation’s debt burden will reach 105 percent of gross domestic product by 2029, just 1 percentage point below the post-World War II record set in 1946.