U.S. budget deficit widens to $867 billion through July

Both spending and receipts were up in July compared to a year ago. (Source: AP)
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(CNN) - The US budget deficit widened to $867 billion for the first 10 months of the fiscal year, an increase of 27% over this time last year, the Treasury Department reported Monday.

The current shortfall exceeds the full-year deficit for fiscal 2018, which was $779 billion.

President Donald Trump, who promised during the 2016 campaign to eliminate the federal debt, has instead overseen a dramatic increase in deficits.

The White House's Office of Management and Budget has predicted that the deficit will exceed $1 trillion for the entire fiscal year, which ends on September 30. The nonpartisan Congressional Budget Office in May had predicted a slightly smaller shortfall of $896 billion for the year, with deficits rising above $1 trillion starting in 2022.

The last time the gap was that big was in 2012, in the aftermath of the financial crisis.

There are a number of factors driving the US deficit increase, including the $1.5 trillion tax cuts signed into law by Trump in 2017 along with a massive spending package passed by Congress.

Tax revenue rose 3% to $2.86 trillion since the start of the fiscal year on October 1 but hasn't kept up with increased federal spending, which increased 8%.

Earlier this month, Trump signed into law a bipartisan two-year budget deal that will raise spending by an additional $320 billion over the next two years and suspended the debt ceiling through mid-2021.

The Committee for a Responsible Federal Budget estimates that the 2017 tax cuts combined with new spending by Congress will add more than $4.1 trillion to the federal debt by 2029.