The budget deficit rose to $587 billion in fiscal year 2016, the Treasury Department reported Friday, up from $439 billion the year before.
Friday’s statement from the Treasury marked the first time since 2011 that the deficit has risen, and the first time it has risen as a share of economic output since 2009. It was now 3.2 percent of gross domestic product, about the average for the past 40 years.
The White House had estimated in June that the deficit for fiscal year 2016, which ended on Sept. 30, would be $600 billion. The deficit represents the annual shortfall of revenues compared to spending, and each annual deficit contributes to the total national debt.
The 2016 deficit was driven up in part because of timing: Because the new fiscal year began on a weekend, about $41 billion of federal payments were pulled into the previous week, and thus into fiscal year 2016.
Total spending was $3.85 billion, up 5 percent annually. Revenues were $3.27 trillion, a 1 percent increase.
Treasury Secretary Jack Lew touted the news Friday, noting that the deficit has fallen since the trillion-dollar-plus deficits in the years following the financial crisis.
“We have built a solid foundation for continued investment in economic growth and opportunity for all, while maintaining fiscal discipline and using fiscal space appropriately to grow the economy,” Lew said in a statement.
Obama Office of Management and Budget director Shaun Donovan also noted that the 2016 shortfall would have been “meaningfully lower” if Congress had not passed a package of unpaid-for tax cuts at the end of last year.
The Congressional Budget Office has projected that the budget deficit will total just under $600 billion in fiscal year 2017, and then drop the next year to $520 billion, in part because of another timing shift in payments. From there on out, deficits are expected to increase indefinitely, eventually hitting $1 trillion by 2024, or about 4 percent of economic output by then.
