(Reuters) – The U.S. government posted a $220 billion budget deficit for August, up 29% from the $171 billion gap reported in the same month last year, as spending on health services, education and interest on the public debt outstripped a double-digit increase in revenues, the Treasury Department said on Tuesday.
The Treasury said that receipts in August grew by $35 billion, or 13%, from a year earlier to $304 billion, with a $25 billion, or 11%, increase in individual income tax withholdings accounting for most of the gain.
But outlays climbed by $84 billion, or 19%, to $523 billion, leading to only the second year-over-year increase in the federal deficit so far in fiscal 2022, which ends on Sept. 30. The other year-over-year increase occurred in November 2021.
The year-over-year spending increase last month was led by a $50 billion, or 153%, spike in outlays for Medicare, the health insurance program for the elderly, and a $19 billion, or 127%, jump in education spending. A $30 billion, or 53%, increase in interest on Treasury securities reflects the interest rate increases that have accelerated this year as the Federal Reserve has fought to contain the highest inflation in four decades.
For the first 11 months of fiscal 2022, the deficit fell 65% to $946 billion from $2.71 trillion in the prior-year period, which contained the bulk of the spending from President Joe Biden’s $1.9 trillion American Rescue Plan Act.
(Reporting by Dan Burns; Editing by Paul Simao)
