In the first 11 months of fiscal year 2018, the U.S. federal deficit soared to $895 billion, an increase of $222 billion (32 percent) from the previous year, the nonpartisan Congressional Budget Office (CBO) estimated late Monday.
The CBO reported that the biggest drivers of the skyrocketing deficit were the Republican tax law and the bipartisan agreement to increase spending.
MarketWatch notes that revenue from individual and payroll taxes increased by $105 billion, or 4 percent, while corporate taxes fell $71 billion, or 30 percent.
Spending on Social Security and Medicare have climbed 4% as more baby boomers retire, outlays on net interest on the debt have jumped 19% in part due to a higher rate of inflation triggering more payments to inflation-protected securities holders, and defense spending has jumped 6%.
Kevin Hassett, the White House chief economic adviser, was careful in a briefing with reporters on Monday to say the corporate tax cuts — but not the whole package — would pay for themselves with higher growth.
“I think that the notion that the corporate tax side has about paid for itself is clearly in the data,” he said. “On the individual side, there was about a trillion-dollar cost. About $700 billion of that was a refundable child credit that got expanded at the last minute to get the votes they needed to pass it.”