Bud­get deficit con­tin­ues its up­ward trend

USA TODAY Weekend Extra - - MONEY - Dan Caplinger

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.

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