US deficit reduction on track despite July adding $98bn to red

 
Julian Harris
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THE US government is on track to substantially reduce its budget deficit for the current financial year, despite spending $98bn (£63.4bn) more than it took in last month.

Figures released last night showed July’s deficit up sharply from the $69.6bn recorded in the same month of 2012, yet statisticians said this was due to different calendar timings from last year compared to 2013.

In the 10 months that make up the current US fiscal year, its federal government has run $607bn into the red – down nearly 38 per cent compared to 2012, when $974bn of deficit was recorded in the same period.

Higher government receipts have driven the improvement.

“On a financial year to date basis, total receipts were up 13.8 per cent, with a 14.7 per cent jump in combined individual income and social security taxes largely responsible,” noted Barclays analyst Cooper Howes.

Government spending has been curbed this year, yet in July total spending rose to $298bn, from $254bn in the same month of 2012.

Meanwhile tax receipts climbed to $200bn last month, up from $185bn in July 2012.

Disagreements over how to control America’s enormous government deficit have divided Republicans and Democrats in recent years. The state’s debt is nearing $16.8 trillion.