Trump’s First Annual Budget Deficit Rises to a Six-Year High

U.S. Government Deficit Grew 17% in Fiscal 2018

Deficit balloons to $779 billion in Trump’s second year

This is the highest the deficit has been in six years.

"President Trump prioritized making a significant investment in America's military after years of reductions in military spending undermined our preparedness and national security", Treasury Secretary Steven Mnuchin said in a statement.

Reuters reports that, as the government closes out fiscal year 2017, a spending spree has driven it further into the red, though the deficit may not last for long.

The U.S. government's $523 billion in interest payments to service its debt in 2018 - the highest ever - was more than the entire economic output of Belgium this year, Bloomberg reported.

Corporate tax collections in the US fell 22 percent, or $76 billion, in the fiscal year, which ended September 30.

The figure is $113 billion more than it was a year ago.

Revenues generally tumbled after December when Trump signed into law a $1.5 trillion package of corporate and personal income tax cuts over the next decade.

But the Congressional Budget Office, a nonpartisan arm of Congress, forecasts government spending will outweigh revenue by $973 billion in fiscal 2019 and more than $1 trillion the next year.

"Without Republicans' tax cuts, war-fighting, and defence build-up since 2001, the federal budget would have been US$156 billion in surplus", Sanders said.

"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", Mnuchin said.

In an effort to finance the yawning budget gap, Treasury has signaled it will step up the pace of debt issuance, borrowing $769 billion in the second half of the current calendar year.

"The president is very much aware of the realities presented by our national debt", said White House budget director Mick Mulvaney.

In response to the Treasury's statement, Democrat Senator Bernie Sanders blamed Republicans for the deficit. The Trump administration estimates that the deficit will increase to $1.09 trillion in the next fiscal year.

That's when the Obama administration was using tax cuts and increased spending, along with support for the banking system, to combat the 2008 financial crisis and Great Recession, the worst economic downturn since the Great Depression of the 1930s.

Higher defense spending, plus increases in Medicaid, Social Security and disaster relief were contributing factors.

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