U.S. Budget Deficit Hit $3.1 Trillion Record
The U.S. government on Wednesday set an unprecedented high of $3.1 trillion in debt for a single year, leaving the Federal Reserve with a new challenge to help curb record borrowing that continues to harm the government’s finances.
The fiscal 2018 deficit — the difference between the amount of money the government took in from tax revenue and the amount it spent — grew by 17 percent from 2017.
With Republicans about to take control of the White House and both chambers of Congress next year, budget analysts have warned that massive spending increases may be in store. That spending and tax cuts would add to the deficit in the years ahead, though officials in both parties agree that higher deficits are not a solution.
“This record $3.1 trillion in public debt is going to limit our fiscal options, reduce economic growth, increase the real costs of government, and further harm our economy,” Chris Edwards, a tax analyst at the Cato Institute and a frequent critic of the Democrats’ tax overhaul, said in a statement.
The Treasury Department, which tracks the national debt, sent out a document in response to the report that said the budget deficit is expected to shrink in coming years, even though increases in spending are likely to keep it rising for a while. The department also wrote that debt held by the public, which is the total of federal bonds and Treasury notes held by private investors, had increased to $20.8 trillion.
Wednesday’s report also shows that the U.S. government spent $20.6 trillion over the year, including record amounts on mandatory spending on Social Security and Medicare, while it collected $19.3 trillion in tax revenue.