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US government budget deficit soars to 6-year high

US government budget deficit soars to 6-year high
The US federal budget deficit jumped to $779 billion in fiscal year 2018, which ended September 30. It is the largest deficit since 2012, when it topped $1 trillion, according to the Treasury Department.

The figure is $113 billion more than it was a year ago. The statement from Treasury Secretary Steven Mnuchin showed the 2018 deficit amounted to 3.9 percent of the country’s more than $18 trillion annual economy, up from 3.5 percent last year.

The deficit worsened because tax revenues are not keeping pace with government spending, which has boosted the long-term debt figure to more than $21 trillion. The spending rose by $127 billion last year, while tax collections increased by $14 billion.

The US government’s budget director, Mick Mulvaney, said the nation’s “booming economy will create increased government revenues — an important step toward long-term fiscal sustainability.”

READ MORE: What is behind soaring US budget deficit? RT’s Boom Bust show investigates

Mulvaney added that “this fiscal picture is a blunt warning to Congress of the dire consequences of irresponsible and unnecessary spending.”

Debt will likely worsen in the coming years, according to official projections. The Congressional Budget Office estimates that the budget deficit for 2019 will top $1 trillion and will eclipse the trillion-dollar mark in 2020.

For more stories on economy & finance visit RT's business section