WASHINGTON – The federal budget deficit fell sharply in July from a year earlier, largely because of a quirk in the calendar.
The U.S. Treasury Department said Thursday that the budget gap came in at $42.9 billion last month, down from $112.8 billion in July 2016. The bulk of the improvement came because benefit payments that normally would have gone out in July went out in June this year because July 1 fell on a Saturday.
Through the first 10 months of the budget year, the federal government is running a $566 billion deficit, up 11 per cent from the same period of fiscal 2016. Tax collections are up 2.3 per cent, but spending has risen 3.6 per cent so far this fiscal year.
The Congressional Budget Office forecasts that the deficit for the budget year ending Sept. 30 will come in at $693 billion, up from $584 billion in budget year 2016.
Congress is facing a deadline of Oct. 1 for getting a budget approved for the next fiscal year or face the prospect of a government shutdown. Lawmakers are expected to pass a stop-gap spending measure to buy time to iron out differences.