WASHINGTON – The federal budget deficit widened in November, driven by higher spending in areas as such as Social Security, Medicare and defence.
The November deficit climbed to $64.6 billion, up 13.6 per cent from a year ago, the Treasury Department reported Thursday. For the first two months of the budget year that began on Oct. 1, the deficit totalled $201.1 billion, a 12.6 per cent jump from a year ago.
Total receipts are up 2.9 per cent to $416 billion over the past two months compared to a year ago. Tax revenues are growing as unemployment declines. But spending grew an even larger 5.9 per cent to $617.1 billion.
The latest numbers underscore the deepening impact of paying benefits to a growing number of retiring baby boomers. The report said Social Security spending expanded 4 per cent, while Medicare spending increased 9 per cent.
Spending on Medicaid, the government health care program for low-income individuals, rose 12 per cent, partly due to an expansion authorized under the Affordable Care Act.
Spending on defence military programs totalled $99 billion In October and November, a 2 per cent increase over the same period last year.
For the 2015 budget year that ended Sept. 30, the deficit fell to $438.9 billion, its lowest level in eight years. The Congressional Budget Office in August forecast that the deficit for 2016 will decline further to $414 billion and then rise slightly to $416 billion in 2017.
After 2017, the CBO expects the deficits to begin rising sharply, fueled by significant growth in Social Security and health care benefits as more baby boomers retire. CBO is forecasting the deficits will top $1 trillion annually by 2025.
Congress is facing a Friday deadline to reach agreement on an omnibus spending bill to avoid a government shutdown.
The broad outlines of a two-year budget deal were reached in negotiations overseen by former House Speaker John Boehner in October before he handed over his job to new Speaker Paul Ryan, R-Wisconsin. But that agreement was just a blueprint with Congress now required to fill in the specifics.
The October deal did avert a looming crisis over raising the national debt. Lawmakers approved suspending the debt ceiling until March 2017, allowing borrowing to rise with no cap until that time. The national debt currently stands at $18.7 billion.
The expectation is that lawmakers will buy more time for negotiations by passing another stop-gap spending measure.