Government spending

The rise and fall and rise of the budget deficit

Data: FRED and U.S. Department of the Treasury; Chart: Naema Ahmed/Axios

The federal deficit is now 17% higher than it was at the end of the last fiscal year, according to figures the Treasury Department released this week — but that just begins to tell the story of all the red ink we've been building up. Here's how the deficits have grown, shrunk, and grown again over the last 58 years.

Why it matters: Senate Majority Leader Mitch McConnell said in an interview with Bloomberg that the deficits are "driven by the three big entitlement programs" — Social Security, Medicare, and Medicaid — and most budget experts agree that entitlement programs drive most of the spending in the federal budget. But the latest increase also provides evidence that the new tax cuts could be making the deficits worse, as the Congressional Budget Office said they would.

U.S. budget deficit grew by $113 billion in fiscal year 2018

Trump and Mnuchin
Photo: Nicholas Kamm/AFP via Getty Images

The U.S. budget deficit grew by $113 billion in fiscal year 2018, driven by tax cuts and increased federal spending on defense, Medicaid, Social Security and disaster relief, reports CNBC.

The big picture: The total deficit for FY 2018 came in at $779 billion, or 3.9% of U.S. GDP, and was the largest of any year since 2012. In a statement, Office of Management and Budget Director Mick Mulvaney said that "America's booming economy will create increased government revenues," but warned that Congress should be wary of the "dire consequences" of irresponsible spending.