Home >News Updates >Financial News >World Economy
U.S. Federal Deficit in Fiscal Year 2019 Hits 7-Year High

The U.S. federal budget deficit reached 984 billion U.S. dollars in the fiscal year 2019, up by 26 percent year-on-year, and is the highest since 2012, the Treasury Department said Friday.

The federal deficit was 4.6 percent of the gross domestic product (GDP) in the fiscal year that ended on Sept. 30, which is 0.8 percentage point higher than the previous year, the department said.

Total outlays for the fiscal year 2019 stood at 4,447 billion dollars, up by 8 percent from the previous year, while total receipts stood at 3,462 billion dollars, up by 4 percent.

The top three outlays in the fiscal year are 1,044 billion dollars on social security, 688 billion dollars on national defense, and 651 billion dollars on federal health insurance Medicare.

Tim Penny, co-chair of the Committee for a Responsible Federal Budget, a nonpartisan watchdog group, said in a statement on Friday that by next year, U.S. federal deficit will likely top 1 trillion dollars and keep rising indefinitely, which is "unsustainable by any measure."

"Throwing tax cuts and spending increases on the national credit card were not examples of bipartisanship or leadership. They were examples of irresponsibility and short-sightedness," Penny said. "It is time to stop fighting and come together to solve our nation's biggest fiscal challenges."

U.S. Treasury Secretary Steven Mnuchin, meanwhile, said in a statement that "in order to truly put America on a sustainable financial path, we must enact proposals -- like the President's 2020 budget plan -- to cut wasteful and irresponsible spending."

The Congressional Budget Office (CBO) recently estimated that the 2019 budget deficit would be 960 billion dollars and average 1.2 trillion dollars between 2020 and 2029.

Over the coming decade, deficits (after adjustments to exclude the effects of shifts in the timing of certain payments) fluctuate between 4.4 percent and 4.8 percent of GDP, "well above the average over the past 50 years," the CBO said in a report released in late August.

Earlier in August, U.S. President Donald Trump signed the Bipartisan Budget Act of 2019, which boosts discretionary spending limits and suspends the public debt limit for the next two years.

The budget deal will lift the budget cap for discretionary spending to 1.37 trillion dollars in 2020 and 1.375 trillion dollars in 2021, expanding defense outlays, demanded by Republicans, and boosting domestic spending, including health care for veterans, sought by Democrats.

(www.chinaview.cn 2019-10-29)