JAKARTA (TheInsiderStories) – United States (US) experienced the biggest monthly budget deficit to US$234 billion, amid a 20 percent decline in corporate tax revenues and a boost in expenditure, according to an official report last week. Last year, the fiscal gap $215.2 billion.
According to the official US’ Treasury report, the deficit occurred by gap between government spending and revenues, in which the country’s total expenditure was $401 billion, while the government revenues only $167 billion.
The data showed, US government record a deficit for the first five months of the fiscal year (October-February) to $544.2 billion, up nearly 40 percent from the same period the previous year of $ 91 billion.
The widening of the budget deficit was triggered by President Donald Trump’ $1.5 trillion tax reduction package that weighed on revenues and raised concerns about the national debt burden, which reached a record high of $22 trillion in February. State revenues fell less than 1 percent to $1.3 trillion in the same period from the previous year, while spending increased 9 percent to $1.8 trillion.
Reportedly, companies have paid $59.2 billion, compared with $73.5 billion in 2018, when tax laws only apply to some companies. However, in 2017, the year before the law came into effect, the company had paid $87.4 billion.
Large deficiencies are caused by a 20 percent reduction in corporate earnings and increased federal spending. The Trump Administration cut corporate taxes in the new 2017 tax law from 35 percent to 21 percent. Trump’ tax deduction package costs $1.5 trillion from the government.
According to projections, the budget deficit as part of gross domestic product (GDP) is expected to increase to 5.1 percent this year, up from 3.8 percent last year. This shortfall is estimated at 4.9 percent of GDP in 2020, and narrows every year until 2024, according to estimates.
Previously, Chairman Federal Reserve Jerome Powell reiterated his concerns over the government’s deficit and stressed the need to deal with the country’s debt piles. For information, US debt total surpassed $22 trillion for the first time in February – $2 trillion higher than when Trump took administration.
Meanwhile, the Senate Budget Committee launched a fiscal 2020 budget resolution that would allow automatic regulated spending cuts, sharply reducing defense and non-defense spending, while rejecting bright economic assumptions in the president’ budget and deception that would be used to increase military funding.
The budget blueprint will make expenditures in line with the limits set under the 2011 Budget Control Act, placing defense spending at $576 billion and unreasonable expenditure at $543 billion. These levels represented a reduction of $126 billion from the 2019 level agreed under last year’s bipartisan agreement.
On March 28, the Committee will turn from previous Republican Party proposals to cover five years, not ten. The committee proposes to cut the deficit by more than $538 billion over five years and keep an annual deficit of $1 trillion. With that, the deficit will shrink from $903 billion this year to $748 billion by 2024.
The committee will also cut Trump’ defense budget from $750 billion to $643 billion and will cut non-defense spending by $54 billion compared to 2019. This will make lawmakers find an additional deficit of $94 billion over five years.
Written by Daniel Deha, Email: email@example.com