(CN) — The Treasury Department said Monday that the federal budget deficit ballooned to $215.2 billion in February, up significantly from a year ago.
The report is the first that shows the impact the GOP tax cuts passed in December is having on the federal budget.
The February deficit was 12.1 percent higher than a year ago, reflecting in part a drop of $5 billion in individual withholding taxes paid last month compared to February 2017.
In February, employers started using tax tables that withheld less from paychecks based on the new law.
For the first five months of this budget year, the deficit totals $391 billion, an increase of 11.5 percent from the same period a year ago.
President Donald Trump’s new budget projects this year’s deficit will hit $873 billion, up sharply from last year.
The administration argues that the tax cuts will pay for themselves over time by boosting growth. But critics contend that this is an overly optimistic view.
The Committee for a Responsible Federal Budget released a report earlier this month projecting that $1 trillion deficits will return next year with the annual deficit hitting $2.4 trillion in 10 years.