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The federal budget deficit surged to a record for the month of November of $204.9 billion, but a big part of the increase reflected a calendar quirk.
In its monthly budget report, the Treasury Department said Thursday that the deficit for November was $66.4 billion higher than the imbalance in November 2017.
But $44 billion of that figure reflected the fact that December benefits in many government entitlement programs were paid in November this year because Dec. 1 fell on a Saturday.
For the first two months of this budget year, the deficit totals $305.4 billion, up 51.4 percent from the same period last year. The Trump administration is projecting that this year’s deficit will top $1 trillion, reflecting increased government spending and the loss of revenue from a big tax cut.
The new report showed that the higher tariffs from President Donald Trump’s get-tough trade policies are showing up in the budget totals. Customs duties totaled $6 billion in November, up 99 percent from November 2017.
Trump has imposed penalty tariffs on steel and aluminum imports from a number of countries and on $250 billion of Chinese imports as the administration seeks to apply pressure to other countries to reduce their barriers to American exports. However, China and other nations have retaliated by imposing penalty tariffs on U.S. exports, sparking a tit-for-tat trade war.
The administration still believes it will prevail and is currently in talks with China over trade practices the administration feels are unfair to American companies and workers.
Three years of $1 trillion deficits
Last year’s budget deficit totaled $779 billion. The administration is projecting that this year’s deficit, for a budget year that runs from October through September, will total $1.09 trillion. The administration sees the deficit remaining above $1 trillion for three straight years.
The only time the government has run deficits of this size was for four years from 2009 through 2012 when the Obama administration was boosting spending to grapple with the 2008 financial crisis and the worst recession since the 1930s.
Trump has said that the new budget he will unveil next February will require 5 percent spending cuts for domestic agencies in a bid to trim future deficits. The administration is also counting on government revenues to be increased by faster economic growth from the $1.5 trillion tax cut passed a year ago.
The $204.9 billion deficit last month was the biggest deficit ever recorded in November, a month when the government normally runs a deficit. Outlays were also a record in the month of November.
Through the first two months of this budget year, revenues total $458.7 billion, 3.4 percent higher than the same period a year ago. Outlays totaled $764 billion, up 18.4 percent from the same period a year ago.