US: America’s budget deficit ballooned to $779 billion in 2018, the federal government said on Monday, as higher spending and stagnating tax revenue pushed the nation’s debt burden higher.
The approximately 17 percent jump in the federal deficit came despite strong growth in the overall U.S. economy, an unusual instance in which the economy and the deficit are expanding at the same time. Typically, strong economic growth translates into lower deficits as the government collects more from taxpayers.
“What’s going on is revenues are not rising when they otherwise would be,” said Marc Goldwein, senior vice president of the Committee for a Responsible Federal Budget. “The economy is growing by 5 to 6 percent, and revenue is basically flat.”
Business tax revenue was depressed in part because the Republican tax law passed in the fall of 2017 reduced the corporate tax rate from 35 percent to 21 percent, among other changes.
