No Matter The Party, The Deficit Grows
Article by FLN Staff.
How did this happen? A Republican won the White House, and his party controls Congress, yet the Fiscal Year Deficit stands at $672 Billion, with this year on track to climb to $955 Billion. There are several reasons for these numbers that need a quick look.
The outgoing president locks in most of the next president’s first year spending. In 2016, the deficit was $585 Billion under Obama or 3.1 percent of Gross Domestic Product (GDP); it increased to 3.4% in Trump’s first year. The New York Times reported that around $50 Billion of that was hurricane relief to Florida, Texas and Puerto Rico; that number doesn’t include wildfire relief. The balance of the increase can be attributed to increased interest payments, a constant in federal spending, and increased defense spending. The current estimate on additional hurricane relief is $93 Billion for FY 2018.
Fiscal reality is setting in on a Washington that is still in la-la land, passing CR’s modeled after those imposed from the Obama/Reid/Pelosi era. President Trump has proposed a budget that cuts $4.5 Trillion over the next decade that has yet to be acted upon because of the 2018 midterm elections, and in the meantime, wants additional defense spending and an infrastructure bill. Republicans effectively have a majority in name only, as they need every one of their fifty-one votes to enact a budget. Without decisive action and hard decisions on defense and entitlement spending, we aren’t far off from the post-bailout trillion dollar deficits that became a hallmark of the Bush/Obama years.
Image Credit: By Jericho [CC BY 3.0 (http://creativecommons.org/licenses/by/3.0)], via Wikimedia Commons