The U.S. budget deficit swelled from $666 billion in fiscal year 2017 to $779 billion in 2018, a roughly 17 percent increase that has produced the highest deficit since 2012, according to Treasury Department data released Monday.
The deficit was driven largely by a bipartisan spending package passed in February. The package included hikes in defense and domestic spending and was projected to add $300 billion to the deficit, a proposition criticized by Congress’s more conservative members. (RELATED: Congress Passes Huge Budget, But It’s Not Trump’s)
“President Trump prioritized making a significant investment in America’s military after years of reductions in military spending undermined our preparedness and national security,” Treasury Secretary Steven Mnuchin said in a statement. “Going forward the President’s economic policies that have stimulated strong economic growth, combined with proposals to cut wasteful spending, will lead America toward a sustainable financial path.”
Treasury Department graph of data showing the growing deficit from fiscal years 2017 to 2018. (Screenshot/Treasury Department)
Increases in tax revenue slowed year to year but still gained slightly – less than .5 percent – over 2017. The slowdown stemmed from a tax reduction bill signed by Trump in December.
Spurred by lower taxes, strong economic growth overtook increases in the deficit, and federal spending actually fell as a share of Gross Domestic Product from 20.7 percent in fiscal year 2017 to 20.3 percent in fiscal year 2018.
The U.S. had a record budget surplus for September of $119 billion, but the gain is owed largely to pushing back some payments past the Sept. 30 deadline that marked the end of the 2018 fiscal year, Reuters reports.
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