Budget deficit continues its upward trend

Across the U.S., families have to keep their budgets balanced in order to make ends meet. But the same has never been true of the U.S. government, which has routinely run deficits by spending more than it brings in through taxes and other revenue sources.

Budget deficits have been a bipartisan effort, with Republicans and Democrats trading positions of power without having found any permanent resolutions to the issue.

In October, the Treasury Department announced the budget deficit for fiscal 2018, which ended on Sept. 30, rose to $779 billion. That was up from $666 billion the year before, marking the third consecutive year of higher deficits.

Rising deficits were largely expected for several reasons. First, tax cuts that took effect at the beginning of calendar 2018 reduced the amount of quarterly tax payments taxpayers paid to the Treasury during the first nine months of the year. Also, rising interest rates forced the federal government to pay more in interest on the national debt, which stands at more than $21 trillion. And finally, an increase in inflation contributed to higher government spending for several key programs.

With current projections for more than $1 trillion in deficits for fiscal 2019, many expect debate to center on what combination of spending cuts and tax increases is most appropriate to get the U.S. government on a firmer financial footing. Yet given the past track record of lawmakers and presidential administrations, Americans shouldn’t expect a quick resolution anytime soon.