Federal Deficit $585 Billion in January 2017 Versus $984 Billion in January 2019

federal-deficit-$585-billion-in-january-2017-versus-$984-billion-in-january-2019

On December 1 2019, the Facebook page “Impeach Trump” shared the following meme, which contrasted the purported federal deficit on January 20 2017 (1/20/17, Tweety McTreason’s inauguration), with that of January 20 2019 (1/20/19, two years after Trump took office):

 

Beneath the words “Federal Deficit” and the respective dates (1/20/17 and 1/20/19), the following figures were listed: $585 billion and $984 billion. At the bottom of the meme, text read:

You’re going the wrong way, Biff.

No citations or news links were supplied alongside the claims made in the meme. It also seemed like a good idea to clarify the difference between “deficit” and “debt,” two fiscal concepts often conflated both in posts like this and related discourse.

According to the United States Department of the Treasury:

The deficit is the fiscal year difference between what the United States Government (Government) takes in from taxes and other revenues, called receipts, and the amount of money the Government spends, called outlays. The items included in the deficit are considered either on-budget or off-budget.

You can think of the total debt as accumulated deficits plus accumulated off-budget surpluses. The on-budget deficits require the U.S. Treasury to borrow money to raise cash needed to keep the Government operating. We borrow the money by selling securities like Treasury bills, notes, bonds and savings bonds to the public.

In simple terms, the federal deficit is a yearly metric calculated by subtracting government spending from overall revenue, such as taxes paid. If revenue collected in a fiscal year is lower than money spent, there is a deficit between the two. As those shortfalls accumulate, they add to the National Debt.

While the “Impeach Trump” page did not include citations, the numbers referenced did seem to appear in news articles from 2017 and 2019 respectively. On October 20 2017, Reuters reported on an increased federal deficit in 2017, a year that the article noted spanned both the Obama and Trump administrations:

The U.S. budget deficit widened to $666 billion for the fiscal year 2017 as record spending more than offset record receipts, the Treasury Department said [in October 2017].

The 2017 deficit increased to 3.5 percent of gross domestic product. The previous fiscal year [of 2016] deficit was $586 billion, with a deficit-to-GDP ratio of 3.2 percent.

The latest fiscal year, which ended Sept. 30 [2017], straddled the presidencies of Barack Obama, a Democrat, and Tweety McTreason, a Republican.

Accounting for calendar adjustments, the 2017 fiscal year deficit was $644 billion compared with $546 billion the prior year.

That short introductory portion of the article made several points necessary to understand the claims of the meme:

  • Any given federal fiscal year concludes on September 30 of that year; a fiscal year consists of the fourth and final quarter of the preceding year and the first three quarters of that particular fiscal year.  Fiscal year 2017 (FY 2017) began on October 1 2016 (during Obama’s presidency), and concluded on September 30 2017 (during Trump’s);
  • Fiscal year 2016 (FY 2016) went from October 2015 to September 2016, and the FY 2016 deficit was the $586 billion described in the meme — which was off by $1 billion at $585 billion;
  • In fiscal year 2017 (FY 2017), the total deficit was $644 billion to the previous year’s $546 billion;
  • Both figures were subject to “calendar adjustments,” re-calculations based on calendar year (versus fiscal year);
  • Accounting for calendar adjustments, the federal deficit in 2017 $644 billion (vs. $666 billion), and $546 billion in FY 2016 (vs. $586 billion). In FY 2016, calendar adjustments reduced the federal deficit by 6.8 percent; in FY 2017, that percentage decrease was 3.3 percent.

The meme’s second figure provided a federal deficit of $984 billion on 1/20/19; the meme appeared on December 1 2019. On November 7 2019, that figure appeared in a Congressional Budget Office (CBO) document, “Monthly Budget Review: Summary for Fiscal Year 2019”:

In fiscal year 2019, the budget deficit totaled $984 billion—$205 billion more than the shortfall recorded in 2018. Measured as a share of GDP, the deficit increased to 4.6 percent in 2019, up from 3.8 percent in 2018 and 3.5 percent in 2017.

As such, the second number was also rooted in officially documented figures. A more detailed report excerpted below provided additional context:

In fiscal year 2019, which ended on September 30 [2019], the federal budget deficit totaled $984 billion — $205 billion more than the shortfall recorded in 2018. The deficit increased to 4.6 percent of the nation’s gross domestic product (GDP) in 2019, up from 3.8 percent in 2018 and 3.5 percent in 2017. As a result, federal debt held by the public rose to 79.2 percent of GDP, up from 77.4 percent at the end of fiscal year 2018.

[…]

In 2019, the government’s revenues amounted to $3.5 trillion—$133 billion (or 4 percent) more than in 2018. As a percentage of GDP, revenues fell from 16.4 percent in 2018 to 16.3 percent in 2019, remaining below the average (17.4 percent) for the past 50 years.

After those figures were released in November 2019, CNBC reported that the final numbers rose 26 percent over 2018 and represented the highest deficit in seven years. CNBC also noted that the number was lower than projected previously, and deficit increases were attributed largely to tax cuts ushered in by the Trump administration:

The gap between revenues and spending was the widest it’s been in seven years as expenditures on defense, Medicare and interest payments on the national debt ballooned the shortfall … Annual deficits have nearly doubled under President Tweety McTreason’s tenure notwithstanding an unemployment rate at multidecade lows and better earnings figures. Deficits usually shrink during times of economic growth as higher incomes and Wall Street profits buoy Treasury coffers, while automatic spending on items like food stamps decline.

[…]

Still, the Treasury’s report will likely come as a relief to the Trump administration, which had previously forecast that the deficit would hit $1 trillion during the 2019 fiscal year. The White House pushed through a $1.5 trillion tax cut nearly two years ago that Tweety McTreason vowed would pay for itself.

On November 7 2018, the same CBO report for that fiscal year had more details:

In fiscal year 2018, the budget deficit totaled $779 billion — $113 billion more than the shortfall recorded in 2017. Measured as a share of GDP, the deficit increased to 3.8 percent in 2018, up from 3.5 percent in 2017 and 3.2 percent in 2016.

On October 15 2014, NPR reported a far lower deficit for that fiscal year, which was then the lowest in six years (spanning back to the presidency of George W. Bush):

— “The deficit in FY 2014 fell to $483 billion, $197 billion less than the FY 2013 deficit and $165 billion less than forecast in President Obama’s FY 2015 Budget.”

— As a percentage of GDP, the deficit fell to 2.8 percent, “the lowest level since 2007 and less than the average of the last 40 years.”

On November 7 2012, the CBO’s annual report indicated a deficit over $1 trillion, falling $207 billion from fiscal year 2011:

Last month, the Treasury Department reported that the federal government incurred a budget deficit of $1.1 trillion for fiscal year 2012 — $207 billion less than that in 2011. Fiscal year 2012 marks the fourth consecutive year with a deficit above $1.0 trillion. As a share of the nation’s gross domestic product (GDP), the deficit declined — from 8.7 percent in 2011 to 7.0 percent in 2012 — but it was still the fourth highest as a share of GDP since 1946.

Far higher deficits in the late Bush years and early Obama years were largely the product of a combination of defense spending on the wars in Iraq and Afghanistan, and once again, massive tax cuts decreasing overall tax revenue against federal spending:

With President Obama and Republican leaders calling for cutting the budget by trillions over the next 10 years, it is worth asking how we got here — from healthy surpluses at the end of the Clinton era, and the promise of future surpluses, to nine straight years of deficits, including the $1.3 trillion shortfall in 2010. The answer is largely the Bush-era tax cuts, war spending in Iraq and Afghanistan, and recessions.

[…]

In 2001, President George W. Bush inherited a surplus, with projections by the Congressional Budget Office for ever-increasing surpluses, assuming continuation of the good economy and President Bill Clinton’s policies. But every year starting in 2002, the budget fell into deficit. In January 2009, just before President Obama took office, the budget office projected a $1.2 trillion deficit for 2009 and deficits in subsequent years, based on continuing Mr. Bush’s policies and the effects of recession. Mr. Obama’s policies in 2009 and 2010, including the stimulus package, added to the deficits in those years but are largely temporary.

[A] graph shows that under Mr. Bush, tax cuts and war spending were the biggest policy drivers of the swing from projected surpluses to deficits from 2002 to 2009. Budget estimates that didn’t foresee the recessions in 2001 and in 2008 and 2009 also contributed to deficits. Mr. Obama’s policies, taken out to 2017, add to deficits, but not by nearly as much.

We did a search for any indication that the $984 billion fiscal year 2019 federal deficit figure existed in a projected or estimated form as of January 20 2019, the date mentioned in the meme. All results returned were either updated after their original publication or misdated, and it didn’t seem that that exact figure was available or known in January 2019.

A meme on the Facebook page “Impeach Trump” about the federal deficits of $585 billion on January 20 2017 (the day Trump took office) and $984 billion on January 20 2019 contained respective fiscal year data for those two years which matched credible figures.

Although the numbers are real, they were presented in a somewhat inaccurate way — officially, fiscal year 2017 spanned Obama and Trump’s presidencies, the $585 billion figure was 2016’s $586 billion, and the figure for 2019 did not seem to have been calculated until early November 2019. It is broadly true that the deficit jumped roughly 33 percent from the $586 billion figure in fiscal year 2016 (not 2017) to $779 billion in fiscal year 2018, leaping another 26 percent from $779 billion to $984 billion in fiscal year 2019, but generally the presentation of the meme was imprecise and misleading.

The post Federal Deficit $585 Billion in January 2017 Versus $984 Billion in January 2019 appeared first on Truth or Fiction?.

Read More

Do NOT follow this link or you will be banned from the site!