Budget deficit climbs in July with debt limit looming

The federal budget deficit ballooned to $149.2 billion in July, the Treasury Department announced Wednesday. The 58% rise in total receipt losses for the month compared with July of 2014 are partially accounted for by $42 billion in benefit payments that were made a month earlier in FY 2015.

With a shift in the outlay schedule and $4 billion in tax revenue also being moved up by one month, an $111 billion deficit would have been posted by Treasury using the same exact budget items as in July 2014.

At the end of July 2014, the federal budget deficit stood at $94.6 billion for the month.

Despite a 21% increase in July spending compared to last year, the total budget deficit for FY 2015 is estimated to be $425 billion – the lowest since 2007.

FY 2014 budget receipts totaled out at -$483.3 billion.

The actual federal budget deficit will be an important number for the Treasury Department to look at when the fiscal year ends on September 30. Secretary Jacob Lew has had to take “extraordinary measures” (mainly through the suspension of debt issuance) since March 16 in order to keep the federal budget from pushing the national debt over its statutory limit.

As of August 11, the Treasury Department’s total public debt stood at $18.151 trillion.

In a letter to Speaker John Boehner on July 29, Secretary Lew predicted that he would be able to keep the federal government’s balance sheet under the debt limit until late October or early November, but urged Congress to raise the debt limit “as soon as possible.”

Besides dealing with the debt limit, Congress must also pass a comprehensive budget for FY 2016 by October 1 or face another government shutdown similar to what Washington experienced in 2013, when some federal agencies were closed for 16 straight days.

 

[AP] [Treasury.gov] [Photo courtesy Dispatch Times]