U.S. records nearly $75 billion budget deficit in June

The federal government recorded a $74.9 billion deficit in June, a month when the government often runs a surplus, as corporate taxes dropped sharply compared to a year ago.

The June deficit pushed the imbalance so far this year to $607.1 billion, 16.1 percent higher than the same period a year ago,  the Treasury Department said in its monthly report. The Congressional Budget Office is forecasting that the deficit for the entire budget year will total $793 billion, up 19.1 percent from the prior year, reflecting in part the impact of the $1.5 trillion tax cut that Congress approved in December plus increases in government spending lawmakers approved earlier this year.

The government has run a surplus in June in all but 12 of the past 64 years because it is a month when quarterly tax payments are due from both corporations and individuals. 

Revenue from corporate tax payments totaled $41 billion in June, down $20 billion from a year ago. The new report showed that corporate tax payments fell by 33 percent from a year ago and so far this budget year, which began on Oct. 1, are running 20 percent below the same period a year ago.

The tax overhaul bill the GOP pushed through Congress last year reduced the corporate tax rate from 35 percent to 21 percent, although most corporations used various methods to reduce the actual rate they paid under the previous law below the 35 percent figure. The tax legislation also cut individual taxes although Democrats have charged that most of the benefits of this reduction will be seen by the wealthiest taxpayers rather than middle class taxpayers.

Through the first nine months of this calendar year, revenues have totaled $2.54 trillion, an increase of 1.4 percent from the same period a year ago. Government spending has totaled $3.15 trillion, an increase of 3.9 percent from a year ago. The CBO projects that the annual deficits will keep rising past the $1 trillion mark in future years, reflecting the impact of the 10 year tax cut coupled with rising costs for Social Security and Medicare as more baby boomers reach retirement age.