The gap from October through June came in at around $1.4 trillion, according to the department
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The US federal government’s budget deficit widened sharply in the first nine months of the fiscal year to hit $1.39 trillion in June, the Treasury Department said on Thursday. The figure was up from $515.1 billion in the same period last year.
The federal government operates under a fiscal year that begins October 1.
According to the report, the budget gap widened by $227.76 billion in June, up from $88.8 billion in the same month last year.
The Treasury data showed that a sharp increase in government spending and a significant drop in tax revenues were the key reasons behind the widening deficit.
Overall, tax revenues between October and June were 11% lower than the same period a year ago due to a slump in stocks, bonds and other assets. Data showed that in June government receipts declined by $42 billion to $418 billion from a year ago. At the same time, spending increased, with outlays rising $96 billion to $646 billion. Soaring inflation has also added to federal spending.
US Federal Reserve officials have been warning that the government’s finances were on a path that in the long-term would be unsustainable. According to Phillip Swagel, the director of the Congressional Budget Office, the federal deficit will average around $2 trillion per year, adding to the $32.5 trillion national debt.
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“We are projected to spend more on interest payments in the next decade than we will on the entire defense budget,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. “How can anyone possibly think this trend is sustainable?”
“We’re running off the rails at an alarming rate,” MacGuineas stated, adding “We need to do better.”
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