President Trump has largely pushed for an agenda of tax cuts and spending increases that has grown the deficit markedly.
Tax revenue for October 2018 through January 2019 fell $19 billion, or 2%, Treasury said. It noted a major reduction in corporate tax payments over the first four months of the fiscal year — a decline of nearly 25%, or $17 billion.Spending, meanwhile, increased 9% over the same period.
Next week, the White House is expected to propose a new budget plan for the fiscal year that begins in October, and Democrats are working on spending plans of their own. So far, there has been little effort to reconcile differences between both parties, and neither has shown much interest in addressing the widening budget deficit.
The ballooning deficit comes as interest rates are expected to begin rising, driving up the cost of borrowing money. The government is projected to spend $383 billion on interest payments for its debt this year, and that will rise to $581 billion in 2022, according to the Congressional Budget Office.
But the White House and Congress must reach an agreement on a new spending package by Sept. 30 or face anotherPolicymakers must also reach an agreement by this fall on raising or suspending the debt ceiling, as the government will no longer be able to borrow money to cover many payments if Congress doesn’t act.
to the levels needed to offset the $1.5 trillion in tax reductions that were part of the legislation., largely representing an accumulation of all the money it has borrowed to finance programs in past years. A deficit is the one-year gap between spending and revenue, and the debt is the total amount of money owed by the government.
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