US budget deficit hits record high of $204.9 billion in November 2018

WASHINGTON – The federal budget deficit surged to a record for the month of November of $204.9 billion, but a big part of the increase reflected a calendar quirk.

In its monthly budget report, the Treasury Department said Thursday that the deficit for November was $66.4 billion higher than the imbalance in November 2017.

But $44 billion of that figure reflected the fact that December benefits in many government entitlement programs were paid in November this year because Dec. 1 fell on a Saturday.

For the first two months of this budget year, the deficit totals $305.4 billion, up 51.4 percent from the same period last year. The Trump administration is projecting that this year’s deficit will top $1 trillion, reflecting increased government spending and the loss of revenue from a big tax cut.

The new report showed that the higher tariffs from President Donald Trump’s get-tough trade policies are showing up in the budget totals. Customs duties totaled $6 billion in November, up 99 percent from November 2017.

Trump has imposed penalty tariffs on steel and aluminum imports from a number of countries and on $250 billion of Chinese imports as the administration seeks to apply pressure to other countries to reduce their barriers to American exports. However, China and other nations have retaliated by imposing penalty tariffs on US exports, sparking a tit-for-tat trade war.

The administration still believes it will prevail and is currently in talks with China over trade practices the administration feels are unfair to American companies and workers.

Last year’s budget deficit totaled $779 billion. The administration is projecting that this year’s deficit, for a budget year that runs from October through September, will total $1.09 trillion. The administration sees the deficit remaining above $1 trillion for three straight years.