U.S. 2018 budget deficit climbs $113 billion

WASHINGTON — U.S. Treasury Secretary Steven T. Mnuchin and Office of Management and Budget (OMB) Director Mick Mulvaney today released details of the fiscal year (FY) 2018 final budget results. The deficit in FY 2018 was $779 billion, $113 billion more than in the prior fiscal year but $70 billion less than forecast in the FY 2019 Mid-Session Review (MSR). As a percentage of Gross Domestic Product (GDP), the deficit was 3.9 percent, 0.4 percentage point higher than the previous year.

President Trump continues to foster incredible economic strength that stands in stark contrast with the policies of the previous administration. The Tax Cuts and Jobs Act (TCJA), coupled with a renewed focus on economic freedom, has led to a booming economy:

– America is enjoying the longest positive job-growth streak on record – more than four million new jobs have been created since President Trump took office.
– For the first time on record there are more job openings than job seekers.
– Real wage compensation has grown by 1.4 percent. Real median household income rose by 1.8 percent.
– Manufacturing employment is growing at its fastest annual pace since 1995. Since the enactment of the TCJA, business fixed investment has increased at an 8.3 percent annual rate, up from 1.8 percent during the four quarters of 2016.
– Consumer confidence is at peak levels and, during the past four quarters, real GDP has grown 2.9 percent, the fastest four-quarter pace since the second quarter of 2015.

It is clear that Americans are better off today than they were two years ago. The President’s emphasis on increasing economic growth has put more money in the pockets of hard-working Americans. The President’s Budget has provided multiple avenues for Congress to tackle reckless Washington spending with aggressive proposals that reduced deficits by $3.6 trillion over 10 years. Additionally, the President proposed the largest rescissions package in the history of the Impoundment Control Act of 1974, requesting Congress to rescind more than $15 billion in unnecessary spending. The Administration will work with Members of Congress on a renewed focus to reduce the deficit and get our fiscal house back in order.

“President Trump prioritized making a significant investment in America’s military after years of reductions in military spending undermined our preparedness and national security,” said Treasury Secretary Steven T. Mnuchin. “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.”

“The President is very much aware of the realities presented by our national debt. America’s booming economy will create increased government revenues – an important step toward long-term fiscal sustainability. But this fiscal picture is a blunt warning to Congress of the dire consequences of irresponsible and unnecessary spending,” said OMB Director Mulvaney. “The President’s FY 2019 Budget presented a clear roadmap to solving this fiscal nightmare that has been exacerbated by Congress’s continual unwillingness to restrain spending. Going forward, President Trump and this Administration will continue to work with Congress to make the difficult choices needed to bring fiscal restraint, which, when matched with increasing revenue, will reduce our deficit.”

Summary of Fiscal Year 2018 Budget Results

Year-end data from the September 2018 Monthly Treasury Statement of Receipts and Outlays of the United States Government show that the deficit for FY 2018 was $779 billion, $113 billion higher than the prior year’s deficit. As a percentage of GDP, the deficit was 3.9 percent, an increase from 3.5 percent in FY 2017 and above the average of 3.2 percent over the last 40 years.

The FY 2018 deficit was $54 billion less than the estimate of $833 billion in the FY 2019 Budget (Budget), and $70 billion less than the estimate of $849 billion[2] in the MSR, a supplemental update to the Budget published in July.