The Concord Coalition today warned that the rapidly rising federal budget deficit — totaling nearly $779 billion in Fiscal Year 2018 — reflects a structural gap between spending and revenues that is largely ignored in Washington even as it grows worse.
The Treasury Department this afternoon released the figure, which is $113 billion higher than 2017 deficit, along with other data for Fiscal 2018, which ended Sept. 30.
“While not surprising, the confirmation of a ballooning budget deficit is alarming and should be of great concern to elected officials, this year’s congressional candidates and the general public,” said Robert. L. Bixby, executive director of The Concord Coalition. “This problem is not going away on its own. What makes the Fiscal 2018 numbers particularly troubling is that they show a worsening picture despite a strong economy. Rather than taking advantage of this strong economy to improve the fiscal picture, Washington over the past year has made the situation worse.”
Federal receipts for Fiscal 2018 totaled $3,329 billion while spending totaled $4,108 billion. The comparable figures for the previous year were $3,315 billion in receipts and $3,981 billion in outlays. Roughly three-quarters of the spending growth came from mandatory spending programs and interest on the debt, which grow on autopilot. By contrast, revenue was essentially flat despite solid economic growth.
“Policymakers must eventually make some hard choices to bring mandatory spending growth and revenues into better alignment,” Bixby said. “Neither Democrats nor Republicans think this choice-less fiscal policy can go on forever.”
The 2018 deficit added significantly to the total federal debt, which now stands at nearly $21.6 billion. The Congressional Budget Office has previously projected that under current laws the federal government will begin running $1 trillion annual deficits in 2020. The government’s interest costs in 2018 totaled $325 billion, a figure that is projected to rise rapidly in the coming decade and is $62 billion more than was spent last year.
Congress and President Trump approved deficit-financed tax cuts last December and deficit-financed spending increases earlier this year. Treasury Secretary Steven Mnuchin said last week that increases in defense spending were “very, very important,” and pointed out that Democrats wanted additional domestic spending in return.
But if these defense and domestic spending programs are high priorities, elected officials should have figured out a way to pay for them. Simply adding them to the national credit card and expecting future taxpayers to pick up the tab is irresponsible.
