The Treasury Department said Wednesday that the budget deficit from October through December totals $318.9 billion, up from a deficit of $225 billion for the same three months in the previous year. So far this budget year, tax revenue is up a tiny 0.2 percent, reflecting the impacts of the tax cuts passed in 2017. Spending is up 9.6 percent.
The Trump administration contends that its tax cuts will end up boosting government revenue because they will spur increased economic growth. But private economists believe the temporary boost for the tax cuts will soon fade and growth will slow again, resulting in lost government revenue.
The Congressional Budget Office is projecting that this year's deficit will jump to $897 billion, up 15.1 percent from last year's deficit of $779 billion. Last year's deficit had been the largest since 2012.
The CBO said last month that the annual deficits are headed higher over the next decade and will top $1 trillion starting in 2022 and will never drop below $1 trillion in annual deficits through 2029, the end of the CBO forecast window.
The new budget report showed that individual tax receipts were down 1 percent in the October-December period compared to a year ago. Corporate taxes are down 18 percent during the same period. The $1.5 trillion tax cut that President Donald Trump pushed through Congress in December 2017 took effect in January of last year. That meant that the current budget year is being compared to a period from last year's budget before the tax cuts took effect.
Total government receipts were $771.2 billion for the first three months of this budget year, a gain of 0.2 percent. Outlays totaled $1.09 trillion, up 9.6 percent from the first three months of the 2018 budget year.