The U.S. government posted a wider budget deficit in November as spending swelled compared with the same time last year when a shift in the timing of payments for programs like Medicare and Social Security damped outlays.
The deficit was $150.4 billion last month, exceeding the median estimate of economists surveyed by Bloomberg News, compared with $120.3 billion in November 2009, according to the Treasury Department’s budget statement released in Washington. For the first two months of the 2011 fiscal year, the shortfall narrowed to $290.8 billion from $296.7 billion in the same period last year as revenue improved.
Revenue climbed 12 percent last month as the recovery in the job market began boosting individual tax payments. An agreement by President Barack Obama and congressional Republicans including extending Bush-era tax cuts and jobless benefits may boost the deficit over the next decade.
“Personal income has trended higher over the past few months, and we expect this to support the continued recovery in revenue,” Nick Verdi, an economist at Barclays Capital in London, said in a note to clients before the report. Spending remained elevated “as government outlays supporting federal programs continue to be substantial.”
Stocks held earlier gains as reports showed consumer confidence increased more the forecast this month and the trade deficit dropped to a nine-month low. The Standard & Poor’s 500 Index rose 0.5 percent to 1,239.32 at 2:05 p.m. in New York.
Exceeds Median Forecast
A survey of 27 economists conducted by Bloomberg News projected a budget deficit of $138 billion in November. The non- partisan Congressional Budget Office, in a forecast issued Dec. 7, estimated the deficit would total $142 billion.
Total revenue rose 12 percent to $149 billion in November.
Individual income receipts in the first two months of the current fiscal year rose 24 percent to $135.7 billion. Corporate income tax receipts were a negative $7.5 billion.
Total spending rose 18 percent in November to $299.4 billion. Payments that would normally have occurred on Nov. 1, 2009, a Sunday, were instead pushed into October, depressing last year’s total and making this year jump in comparison.
Spending by the Defense Department rose to $123.2 billion for the fiscal year to date. Outlays by the Social Security Administration rose to $127.3 billion.
Spending by the Department of Health and Human Services, which administers the Medicare and Medicaid programs, increased to $144.5 billion.
Senate leaders this week released an agreement crafted by the White House and Republicans to sustain Bush-era tax rates through 2012, set the estate tax at the lowest rate in 80 years, extend jobless aid and cut payroll taxes by 2 percentage points. The legislation would add $857 billion to the federal debt over 10 years, government analysts said.
© Copyright 2014 Bloomberg News. All rights reserved.