America's budget deficit soared to nearly $1 trillion in the 2019 fiscal year as government borrowing swelled, the US Treasury announced Friday.
The deficit jumped by 26 per cent to $984 billion, the highest since 2012, as spending outstripped tax receipts in the wake of the 2017 Republican-led tax cuts.
Tariffs imposed in President Donald Trump's multi-front trade confrontations brought in $30 billion in the year ended September 30, according to the Treasury. "President Trump's economic agenda is working," Treasury Secretary Steve Mnuchin said in a statement, calling on lawmakers to cut "wasteful and irresponsible spending."
The widening deficit underscored the yawning imbalance in America's finances in the Trump era as lawmakers' oft-stated fears for fiscal discipline have fallen by the wayside.
With the economy growing, the government took in more money from workers, importers and companies, who paid $3.5 trillion in taxes, about four per cent more than in 2018.
But spending grew twice as fast, rising 8.2 per cent to $4.5 trillion, driven higher by rising interest on existing public debts, defense spending and outlays for social safety net programs like Medicare and Social Security.
Borrowing from the public swelled to 79.1 per cent of GDP for the year, up from 77.5 per cent in the year before.
Mnuchin has repeatedly argued that the sweeping cuts to corporate and personal income taxes in 2017, would spur economic growth, boosting tax receipts and help the tax cuts pay for themselves.
More recently, however, the White House has emphasized other priorities, with the president saying a stronger military is more important than a balanced budget.