The U.S. government’s budget deficit is widening sharply this year, the Congressional Budget Office said Thursday in a report that comes as Republicans are trying to develop a tax cut package on Capitol Hill.
The agency said the deficit would widen to $693 billion for the fiscal year that ends Sept. 30. That is roughly 3.6 percent of gross domestic product and would mark the largest budget deficit since 2013. In January, the budget office projected that the deficit would be $108 billion less, at $585 billion, or 2.9 percent of GDP.
The primary reason for the larger deficit estimate is that the government is collecting less money in tax receipts than forecast.
Revenue is estimated to be $3.315 trillion for the fiscal year that started Oct. 1. The agency in January projected fiscal 2017 revenue at $3.4 trillion.
The lagging receipts are likely one reason the agency also projected Thursday that the Treasury Department could run out of money to continue paying the government’s bills by early to mid-October if the debt ceiling — which is set by Congress — isn’t increased by then.
Treasury Secretary Steven Mnuchin, asked at a news conference Thursday about Congress acting on the debt ceiling, said, “for the benefit of everybody, the sooner that they do this, the better.”
Because the government runs a budget deficit — it spends more money than it brings in through revenue — the Treasury Department borrows money by issuing debt to cover the difference. But it can issue debt only up to a certain level set by Congress. Mnuchin has said his agency has enough money to pay the bills through September. The budget office’s estimate was…
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