The american federal government posted a $666 billion deficit in the just-completed fiscal year 2017, the Treasury Department announced Friday, marking another year of deteriorating finances as the government slinks back toward the trillion-dollar mark.
It’s a black eye for both President Trump and former President Barack Obama, who split responsibility for the fiscal year, which began Oct. 1, 2016, and ran through Sept. 30.
The deficit is the worst since 2013.
Federal spending grew twice as fast as revenue, accounting for the massive jump in red ink, which rose $80 billion over last year’s $586 billion total.
The figures come just as Republicans are hoping to pass a budget that could lead to even deeper deficits in the near future, and could complicate the GOP’s path to a major tax overhaul.
But Trump administration officials sought to use the numbers to bolster their case for tax cuts, blaming “historically subpar economic growth” for the fiscal struggles.
White House budget director Mick Mulvaney said Sunday that the administration has concluded Congress isn’t interested in trimming the budget, so there’s only one option.
“We had offered $54 billion worth of discretionary cuts in our budget back in March. Only about $4 billion or $5 billion had survived so far on the Hill. We’re not going to be able to cut our way to balance,” Mr. Mulvaney told “Face the Nation” on CBS.
“So the next part of the plan, the next part of that — sort of the calculus, right [that] deficits are revenues less expenditures — is to focus on the revenues. How do we get government revenues up?” he said.
The biggest drivers of the spending increases were Social Security, Medicare and Medicaid — the large entitlement programs that budget watchdogs say will eventually break the federal budget.
Social Security and Medicare increases were a reflection of the aging population, while Medicaid’s increase was due to Obamacare expansion, the CBO said in its analysis of the numbers.
But President Trump has said he won’t consider changes to those programs — a vow Mr. Mulvaney said the president has reiterated to him in recent days — so there’s little chance of a solution there.
Spending on Obamacare’s subsidies for health plans purchased on the exchanges soared by 27 percent as taxpayers had to cover ever-rising premiums within the struggling marketplaces.
The Defense Department, by contrast, grew at just 1 percent.
Other big changes were spikes in loan guarantee costs at the Education and Housing and Urban Development departments.
Interest on the debt also soared by 10 percent.
Veterans Affairs spending grew by $9 billion as the department tried to keep up with growing demand and the fallout from the waitlist scandal that led to a new program allowing veterans to seek care at private clinics and have the government reimburse those costs.