The Congressional Budget Office reported on Tuesday that, with one month to go, the federal deficit for fiscal year 2019 has already topped $1 trillion. As night follows day, Trump administration critics blamed the tax cuts.
And once again, the data prove them wrong.
The CBO report says that the federal deficit reached $1.067 by the end of August. That’s up $168 billion from the comparable period in fiscal year 2018. The deficit this year will be larger than the entire budget was in 1987.
Where did the increase come from? Why, tax cuts, of course.
But the report shows that revenues climbed 3.4% so far this fiscal year – a growth rate that’s faster than GDP. Spending, however, shot up by 6.4%.
Look within the data, in fact, and you see that the tax cuts are working as promised – by accelerating economic growth, they’re at least partially paying for themselves.
Take corporate taxes. Ask any Democrat running for president and they will bemoan the tax “giveaways” to giant corporations. What they won’t tell you is that corporate tax revenues are up 5%.
In fact, corporations paid $8 billion more in the 11 months of this fiscal year than they did in the same period of fiscal year 2018. That increase alone is enough to fully fund the Environmental Protection Agency for an entire year.
What’s more, the CBO notes that corporate income tax payments through May were on 2018 activities. When you compare corporate taxes from June through August to same months last year, they are already up $18 billion – a 48% increase!
Meanwhile, individual income and payroll taxes are up $82 billion – a 3% increase over the prior year. Payroll taxes alone, which are a good indication of how well the job market is because they are automatically deducted from every worker’s wages, are up 6.4%.
Now look at the spending side of the equation.
The CBO report shows that while revenues have climbed by $102 billion, spending shot up by $271 billion.
The entire increase in the deficit over last year is due to rampant spending increases, not the Trump tax cuts.
Spending increases were across the board.
Social Security costs climbed 5.7%; Medicare, 6.5%; Medicaid, 4.6%.
Defense spending is up 7.9%, but spending on everything else in the budget has climbed by 4.5%.
Here’s the really worrisome figure: Interest payments on the national debt is up 14% over the prior year.
It should go without saying that these levels of spending growth are unsustainable. Yet instead of confronting them, lawmakers and the Trump administration are aggravating them. Entitlement reform is a non-issue at the moment. Every increase in defense spending has to be matched with a hike in spending on domestic programs. The national debt continues to explode.
And while Republicans appear indifferent to the debt explosion, Democrats are eager to more than double the size of the federal government, without saying how they’d pay for that increase let alone bring existing annual deficits down to earth.
To paraphrase Herbert Stein, something that can’t go on forever, won’t. The only question is when it won’t.
In the first two months of the new fiscal year, tax revenues are up. But so is the deficit. Why? Because spending continues to outpace revenues. So why do tax cuts keep getting blamed?
The latest monthly budget report from the Congressional Budget Office shows the deficit jumping $102 billion in just the first two months of the new fiscal year.
That sure looks like the deficit is “soaring,” as one news outlet claimed. But as the CBO makes clear, almost all that deficit increase was the result of quirks of the calendar. Depending on where weekends fall, significant sums of spending can get shifted into different months.
A true apples-to-apples comparison, the CBO says, shows that the deficit climbed by just $13 billion. Continue reading
By Ali Meyer • Washington Free Beacon
Repealing the Affordable Care Act’s individual mandate would reduce the federal deficit by $338 billion in the next decade, according to a projection from the Congressional Budget Office.
The individual mandate requires that Americans purchase health insurance or pay a penalty to the Internal Revenue Service for not having coverage. A recent Taxpayer Advocate Service report found that roughly 4 million Americans paid an average penalty of about $708 this year for a total of $2.8 billion.
The budget office predicts that eliminating the mandate would reduce the deficit by $338 billion from 2018 to 2027 and would decrease the number of those with health insurance by 4 million in 2019 and by 13 million in 2027. Even with this loss, the report says that markets would remain stable in almost all areas of the United States over the next decade. Continue reading
by Ali Meyer • Washington Free Beacon
President Donald Trump’s proposed budget for 2018 would reduce the deficit over the next decade by $160 billion and increase GDP at the same time, according to an analysis from the Congressional Budget Office.
Trump’s budget proposes a cut back in mandatory and discretionary spending that would not only reduce the deficit, but the debt as well.
Relative to the size of the economy, federal budget deficits are projected to decline by 2.6 percent to 3.3 percent of gross domestic product over the next 10 years. This would mean that the deficit would be roughly one-third smaller than it was originally projected to be.
Trump’s budget also aims to reduce the debt to 80 percent of GDP, which is 11 percentage points below the budget office’s baseline. By the end of the next decade, debt held by the public is projected to decline by 0.6 percent of GDP. Continue reading
by Ali Meyer • Washington Free Beacon
The Congressional Budget Office issued its latest budget and economic outlook: Government spending is projected to outpace federal tax revenues over the next decade, driving up the debt to record-high levels.
The federal government collected $17 billion more in revenues in 2016 than in 2015, and most of that money came from individual income taxes. Overall, the budget office predicts that revenues will rise by 4 percent on average over the next decade, rising to 18.4 percent of gross domestic product by 2027.
Despite the increasing amount of taxes that the federal government is collecting from the American people, the amount the government spends is even greater. Continue reading
by Ali Meyer • Washington Free Beacon
Outstanding federal debt is projected to hit $28.2 trillion over the next decade, according to a report from the Congressional Budget Office.
At the end of this year, outstanding federal debt is expected to climb to $19.4 trillion and to rise by $8.8 trillion in the next ten years.
The federal government’s budget deficit, which is the difference between how much money the government spends and how much money it takes in through tax collection, will be $590 billion by the end of 2016, $152 billion more than the previous year. Continue reading
Federal tax revenues continue to run at a record pace in fiscal 2014, as the federal government’s total receipts for the fiscal year closed April at $1,735,030,000,000, according to the Monthly Treasury Statement.
Despite this record revenue, the federal government still ran a deficit of $306.411 billion in the first seven months of the fiscal year, which began on Oct. 1, 2013 and will end on Sept. 30, 2014.
In the month of April itself, which usually sees the peak tax revenues for the year, the federal government ran a surplus of $106.853 billion. While taking in $414.237 billion in total receipts during the month, the government spent $307.383 billion.
In fiscal 2013, the federal government also ran a one-month surplus in April, taking in $406.723 billion during the month and spending $293.834 billion, leaving a surplus of $112.889 billion. Continue reading
On Feb. 17, 2009, President Obama promised the sun and the moon and the stars. That was the day, five years ago, when he signed the $800 billion “American Recovery and Reinvestment Act.” President Modesty called it “the most sweeping economic recovery package in our history.” He promised “unprecedented transparency and accountability.” He claimed the spending would lift “two million Americans from poverty.” Ready for the reality smackdown?
The actual cost of the $800 billion pork-laden stimulus has ballooned to nearly $2 trillion. At the time of the law’s signing, the unemployment rate hovered near 8 percent. Obama’s egghead economists projected that the jobless rate would never rise above 8 percent and would plunge to 5 percent by December 2013. The actual jobless rate in January was 6.6 percent, with an abysmal labor force participation rate of 63 percent (a teeny uptick from December, but still at a four-decade low). Continue reading
The debt of the federal government, which is normally subject to a legal limit, jumped by $409 billion in the month of October, according to the U.S. Treasury.
That equals approximately $3,567 for each household in the United States, and is the second-largest one month jump in the debt in the history of the country.
In the continuing resolution deal sealed by President Barack Obama and the Republican congressional leadership last month, the legal limit on the federal debt was suspended until February 7 of next year. Continue reading
I have been broadcasting for 31 years and writing for longer than that. I do not recall ever saying on radio or in print that a president is doing lasting damage to our country. I did not like the presidencies of Jimmy Carter (the last Democrat I voted for) or Bill Clinton. Nor did I care for the “compassionate conservatism” of George W. Bush. In modern political parlance “compassionate” is a euphemism for ever-expanding government.
But I have never written or broadcast that our country was being seriously damaged by a president. So it is with great sadness that I write that President Barack Obama has done and continues to do major damage to America. The only question is whether this can ever be undone. Continue reading
The recent wrangling in Washington over the debt ceiling, with both sides promising to return to battle early next year, never got around to considering this proposition: Maybe debt ceilings are a bad idea, because they may lead to increased spending.
A debt ceiling may seem like a good way to constrain out-of-control government, by focusing attention on the federal deficit and the resulting debt increase. (For the record, the United States debt recently surpassed $17 trillion.) But that focus draws attention from the underlying problem: too much spending.
Debt ceilings also provide a false sense of security. Borrowing will never get too far out of hand, the thinking goes, because the ceiling will cap it. Yet the U.S. debt hits the debt ceiling time and again because the federal government runs chronic deficits. This addiction to overspending has forced Congress to raise the debt ceiling more than 90 times during the past 70 years, and 15 times since 1993 alone. Continue reading
During the shutdown, 85 percent of government stayed open despite the hoopla reported in the media. Government is now 100 percent open. Debt-ceiling deadlines have been averted, but the real problem remains: a $17 trillion debt and a president who continues to pile on new debt at a rate of $1 million a minute.
The government shutdown occurred because Senate Majority Leader Harry Reid allows the Senate to lurch from deadline to deadline without passing a single appropriations bill. Had he done his job and passed each of the 12 appropriations bills, the government could have stayed open.
Opening government has not resolved the big picture — a debt problem so large that it dwarfs all deadlines and threatens the very fabric of the nation. What remains is an unsustainable debt, precisely the problem that motivated me to run for office. Continue reading
It’s all-shutdown-all-the-time in Washington these days. But all that talk has obscured the far bigger challenge facing the nation next week, when the government runs out of room to borrow more money to cover its expenses as it hits the congressionally imposed “debt ceiling.” It would be a disaster for the global economy to see America default on its debts. While it is true America can continue to pay the obligations on its debt and most of its other outlays each month with the tax dollars that are collected, that is only a stop-gap solution. As a nation we must find a sustainable long-term solution to run away debt and eventual insolvency.
Therefore, it is incumbent on all parties to work to work to find a practical and workable long-term solution. Thankfully, we have a recent precedent from the last debt ceiling debate. The result was sequestration. It worked in curbing spending growth, but was a blunt tool, applied across the board. The current shutdown gives us much better information about where the next sequestration should be targeted. Continue reading
For furloughed workers, the federal government shutdown has clearly had an impact. But for most citizens, the shutdown has been notable for largely going unnoticed. That’s not because federal officials aren’t doing their best to make it appear otherwise. In fact, federal officials often seem to be working harder to inconvenience Americans during the shutdown than they worked to serve Americans when the government was in full operation.
For months now, the GOP has been held hostage by a faction of its party that deluded itself into believing President Obama might be rolled on his signature health-care law. Witness now an equally grand delusion on the Democratic side, one that President Obama nurtures at his peril.
According to Democrats, their steadfast refusal to negotiate on the government shutdown or the debt ceiling is rooted in a belief that now is the moment to “break” the GOP “fever.” Democrats are furious that Republicans today use every Washington deadline to extract a spending concession—and insist they must be broken of that habit. Continue reading