WASHINGTON (AP) — The federal budget deficit increased in December and for the third month is running ahead of last year's pace.
The deficit totaled $14.4 billion in December, the Treasury Department reported Wednesday. That compares to a small surplus of $1.9 billion in December 2014.
For the first three months of this budget year, the deficit stood at $215.5 billion, an increase of 22 percent over the same period a year ago.
For the entire year, private economists are forecasting a slight improvement from last year's deficit of $438.9 billion, which had been the lowest annual deficit in eight years. Continued gains in employment are expected to boost federal tax receipts.
Economists at JPMorgan Chase are predicting that the deficit for this budget year will total $425 billion. The Congressional Budget Office, which will update its forecast later this month, had predicted in August that the deficit this year would shrink even more to $414 billion but then begin rising for the rest of the decade and will top $1 trillion again by 2025.
The higher deficits will be driven by growth in Social Security and health care benefits as more baby boomers retire.
Last month, Congress approved a budget package that increased spending by $1.14 trillion this year and will provide $680 billion in tax cuts over the coming decade as part of a compromise agreement between Republicans and Democrats in Congress and the Obama administration.
The measure included many of the domestic spending increases that President Barack Obama had been seeking, while Republicans won greater funding for the military and permanent tax cuts for business investment. The government had been operating under a stop-gap spending measure that gave Congress and the administration time to find a compromise on a number of budget and regulatory issues.
In the budget deals struck late last year was an agreement to suspend the limit on government borrowing, allowing it to increase without any cap until March 2017, two months after the next president takes office.
So far this this budget year that began on Oct. 1, receipts have totaled $765.6 billion, an increase of 3.5 percent from the same period last year. Government spending has totaled $981.2 billion, up 7 percent from a year ago.