The U.S. federal government’s budget deficit has hit $738.6 billion with four months still left in the 2019 fiscal year. This is $206 billion more than the deficit was at the same point in 2018.
What’s the story?
The federal budget deficit is the amount that the government spends beyond the revenue that it takes in during the same time period.
Last year, the Treasury Department had predicted that the 2019 deficit would reach $833 billion. The Congressional Budget Office is now predicting that the deficit end up at around $897 billion. The Congressional Budget Office expects the deficit to pass $1 trillion by the 2022 fiscal year, but data tables published by the White House currently predict that it will reach $1.09 trillion by the end of this year.
According to Reuters, the deficit for the month of May alone ($208 billion) was the highest it had ever been for that month in the history of the country.
Why is the deficit growing so much?
A strong economy has resulted in increased tax revenue, even with the introduction of tax cuts. However, the Trump administration has increased spending at a rate which surpassed that gain in federal income. The Trump administration has also almost doubled the amount of tariffs paid by U.S. importers on goods from other nations this year, to $44.9 billion so far.
The entire federal budget deficit for the 2018 fiscal year was $779 billion. This in turn was 17 percent higher than the previous year, and larger than any federal budget deficit since counter-recession measures in 2012. After hitting a record high of just below $1.3 trillion in 2011, the deficit had fallen back down to $442 billion in 2015.
The U.S. National Debt, which is created by the yearly deficits as well as interest on the debt itself, hit $22 trillion in February and continues to grow.