According to publicly-available monthly Treasury statements, the federal government spent more than $2 trillion in the first half of fiscal year 2019, while also hitting a five-year low in tax revenue, CBS News reports. The result is that President Donald Trump has now surpassed President Barack Obama as the president to preside over the largest federal budget deficit in U.S. history.
Analysts have attributed the record-setting gap between spending and revenue with a combination of a substantial drop in corporate tax revenue coupled with an increase in federal spending. The 2017 tax cuts championed by the president lowered corporate tax rates from 35 percent to 21 percent, bringing the total package price tag for the cuts to an estimated $1.5 trillion.
Spending has been led by the Department of Health and Human Services at $583.491 billion, followed by the Social Security Administration at $540.426 billion, and then the Department of Defense at $325.518 billion. Notably, the fourth largest category is interest paid on Treasury securities, which finance the type of debt required to maintain such deficit spending. This was $259.687 billion for the six-month fiscal period.
“When you pass the most irresponsible tax cut followed by the most irresponsible spending increase, unsurprisingly it leads to the largest deficit numbers,” noted Maya MacGuineas, president of the Committee for a Responsible Federal Budget. “Predictably, that’s exactly where we landed.”
In the past, Trump has been vocally critical of such spending, frequently taking to Twitter to chastise Obama for his role in accelerating it.
“With a record deficit and $15 trillion in debt, @BarackObama is spending $4 million of our money on his Hawaii vacation. Just plain wrong,” Trump tweeted in 2011.
As new records are set in terms of the deficit, the national debt has predictably grown and is now in excess of $22 trillion.
“The deficits under @BarackObama are the highest in America’s history,” Trump similarly tweeted in 2012. “Why is he bankrupting our country?”
While it is unclear whether Trump’s apparently varying opinions on large budget deficits are merely partisan rancor or part of a larger economic philosophy, it is evident that experts are concerned about the trend.
Trump is running up record deficits during a period of expansion, a time when deficits should be lowered to prepare for the next inevitable downturn. https://t.co/JizvZex5fs— (((Eli Barasch)))???????????????????????? (@EDBRSB) April 14, 2019
Jerome Powell, the Federal Reserve Chairman, issued a warning to Congress that the size of the overall federal debt is meaningful, and in this case is becoming a problem. Powell said that, currently, debt is growing faster than the total gross domestic product (GDP), a generally unsustainable trajectory.
A contributing factor to this equation is the deficit’s share of GDP, which is projected to be 5.1 percent by the end of this year, according to the White House Office of Management and Budget.