The federal deficit jumped to $587 billion in Fiscal 2016, up from $439 billion the previous year, the Treasury Department reported Friday. As a percentage of GDP, the deficit increased to 3.2 percent, up from 2.5 percent in Fiscal 2015.
Government receipts for the last fiscal year, which ended Sept. 30, totaled $3.267 trillion. Spending rose to $3.854 trillion. While federal revenue increased from the previous year, spending rose considerably more.
As the economy recovered in recent years from the Great Recession, federal deficits fell. This unfortunately produced widespread complacency in Washington about the need for structural budget reforms.
As fiscal experts have long warned, however, the deficit is now rising again — and, under current law, is projected to continue doing so.
The Treasury reports that in Fiscal 2016 individual income taxes brought in nearly $1.546 trillion while Social Security and other payroll taxes amounted to $1.115 trillion. Corporate taxes amounted to $300 billion, while other taxes and duties brought in $306 billion.
On the spending side, Social Security amounted to $916 billion, Medicare and defense each claimed $595 billion, and interest payments totaled $241 billion. All other federal spending totaled $1.507 trillion, or just 39 percent of the budget.
With an aging population and rising health care costs, spending on entitlement programs and interest are projected to put increasing pressure on other parts of the federal budget in coming years.
External links:
Final Monthly Treasury Report for Fiscal 2016
Statement on Budget Results for Fiscal 2016 (OMB/Treasury)
