For the first time in seven years, the federal deficit has topped $1 trillion. According to a budget review by the nonpartisan Congressional Budget Office, the U.S. budget deficit widened to $1.067 trillion for the first 11 months of the 2019 fiscal year, which ends on September 30. That is an increase of 19 percent over this time last year.
While the White House’s Office of Management and Budget has predicted that the deficit will exceed $1 trillion for the entire fiscal year, there is a chance that it could be less. The government usually collects more revenue in September than it spends, which could bring the overall figure down. The CBO said last month it expected a total deficit of $960 billion in fiscal 2019.
The current shortfall exceeds the full-year deficit for fiscal 2018, which was $898 billion. With one month to go in the fiscal year, the feds have already spent $4.16 trillion. That was more money than was spent in all of 2018, at $4.11 trillion. The nation brought in almost $228 billion in revenues in August, while spending $428 billion. Senior Treasury officials emphasized that federal revenues have climbed nearly 7 percent since May.
A number of factors are driving the U.S. deficit increase. Higher spending on the military, rising interest expenses on government debt, and weak revenues early in the fiscal year are the main culprits. Spending on the military and interest costs on government debt each rose 9 percent from October through August, and Medicare expenses increased 10 percent.
The $1.5 trillion tax cut plan signed into law by President Trump in 2017 and a massive spending package passed by Congress have also added to the total. 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. The deficit is expected to average $1.2 trillion in each of the next 10 years.