FY 2016 Budget Deficit Larger Than Expected

Now projected to reach $590 billion

cash
AP

The annual federal budget deficit is larger than expected and is now projected to reach $590 billion, according to estimates from the Congressional Budget Office.

In the first 10 months of fiscal year 2016, budget deficit projections totaled $514 billion, which is $49 billion more than what was recorded last year at this time.

Based on federal government spending and tax collections so far, the budget office now projects that the annual budget deficit will total $590 billion.

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The government collected $2,679 billion in taxes in the first 10 months of fiscal year 2016, which exceeded the amount the collected last year by $7 billion dollars. This included $1,272 billion in individual income taxes, $933 billion in payroll taxes, $230 billion in corporate income taxes, and $244 billion from other receipts.

"Amounts withheld from workers’ paychecks increased by $60 billion (or 3 percent), probably because of growth in wages and salaries," the budget office said. "The growth of withheld payroll taxes (6 percent) exceeded the growth of withheld individual income taxes."

At the same time, the federal government spent $3,193 billion in the first 10 months of the fiscal year. The government spent $55 billion more than they did last year, an increase of 2 percent.

The largest increases in spending were due to a $24 billion increase in Social Security benefits, $23 billion spent on net interest on the public debt, $18 billion on Medicare spending for payments on prescription drug plans, $7 billion on the Veterans Affairs department for disability payments, and $22 billion for payments to the Federal Communications Commission for licenses to use the electromagnetic spectrum.

Another increase in the deficit was due to Obamacare as the government spent an additional $11 billion for new enrollees who were added through expanded coverage through Medicaid.

The budget office is expected to release detailed estimates for the year and new budget projections later this month.