Federal tax revenues rose during the 2019 fiscal year as the economy grew, but spending increased by over $200 billion more, which is why the country ended up running a deficit approaching $1 trillion, according to Congressional Budget Office data released Thursday.
As debt has accumulated during President Trump’s first term, the focus has turned to tax cuts as the culprit. And while it’s simple math to point out that if the government was collecting more tax revenue than it is currently, the deficit would have been narrower, the truth is that revenues did go up modestly — but that revenue growth was just outpaced by an increase in federal spending.
Specifically, in the 2019 fiscal year, which ended Sept. 30, federal revenues increased by $133 billion (or 4%), but spending spiked by $339 billion (or 8%), driving up the deficit by $205 billion to $984 billion.
Spending was driven by a $115 billion spike in the cost of Medicare, Medicaid, and Social Security, an additional $52 billion in interest payments on the national debt, and a $48 billion spike in defense spending.
Trump has taken an instant gratification approach to fiscal policy, backing lower tax rates and higher defense spending while opposing entitlement reform. It’s no surprise that deficits have continued to soar.