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(Bloomberg) — The U.S. budget deficit widened to $356.6 billion in the first three months of fiscal 2020 as spending rose more than revenue, keeping the federal shortfall on pace to exceed $1 trillion by year-end.
The gap increased 11.8% from the $318.9 billion in October-December of the previous year, the Treasury Department said in its monthly budget report Monday. Government outlays increased 6.7%, while receipts rose 4.6%. The U.S. posted a $13.3 billion deficit in December alone compared with $13.5 billion a year earlier.
The three biggest spending categories are social security, national defense and Medicare, which all increased in the quarter. Outlays rose to $285 billion for social security, to $187 billion for the military and to $393 billion for Medicare and Medicaid. Those overshadowed corporate income taxes, which jumped by 23% to $65 billion, and individual taxes which were about 3% higher at $385 billion.
Spending for mandatory programs like Medicare and Medicaid is expected to increase along with an aging population, and interest payments will form a greater share of total payments, according to the Congressional Budget Office, or CBO, a non-partisan government body.
Meanwhile, U.S. tariffs charged on imports from China and other nations increased by almost 20% to $21 billion in the first quarter of the fiscal year from the same period the previous year. The levies are paid by U.S. importers.
The fiscal deficit is set to surpass $1 trillion in fiscal 2020, according to the CBO. That would be the highest since the financial crisis, when the government significantly boosted spending. As a share of gross domestic product, though, the total deficit will only be about 5%, compared with double that in the recession.
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