US Budget Deficit by President
By Dollar and Percent
Which president ran the largest budget deficits? There are two ways to answer that question. The most popular way is to add up the deficits for each year the president was in office. But a president doesn’t control the first year’s deficit. The previous president’s federal budget is still in effect for most of that year. The federal government's fiscal year runs from October 1 through September 30. As a result, a new president has no influence on the deficit for January through September of that first year.
So, one of the best ways to calculate the deficit is to look at each president’s budgets. Then, simply add the deficits for those budgets. This reflects the president's priorities in black and white. It measures the impact of deficit spending and tax changes in dollars and cents.
- A president’s budget deficit is when the revenue from taxes is lower than the annual spending. in the fiscal year.
- While presidents do influence the debt through policy decisions, there are mandatory spending programs that they cannot control.
- The four presidents with the biggest deficits are Barack Obama, George W. Bush, Ronald Reagan, and George H.W. Bush.
- Donald Trump is on pace to exceed them all.
Four Factors That Influence the Deficit
There are four factors that can influence each president's deficit.
- The president has no control over the mandatory budget or its deficit. That includes Social Security and Medicare benefits. These are the two biggest expenses any president has. The mandatory budget estimates what these programs will cost. The acts of Congress that created the programs also mandate the spending. Unless the president can get Congress to remove or change them, he's got to live with that spending.
- The Constitution gave Congress, not the president, the power to control spending. The president’s budget is just a starting point. Each chamber of Congress prepares a discretionary spending budget. They combine them into the final budget that the president reviews and signs. If a hitch in the budget process keeps the proposed budget from being signed into law, Congress can choose to keep their agencies running at the current budget levels or it can initiate a government shutdown. There have been four shutdowns where operations were affected for more than one business day. The first two happened in the winter of 1995-1996. The third was in 2013. The fourth shutdown started in December 2018 and continued into January 2019.
- Each president inherits many of his predecessors' policies. For example, presidents may suffer from lower revenue. Presidents who raise taxes quickly may become unpopular. This could result in tax cuts rarely disappearing.
- Some presidents have to deal with catastrophic events. President Obama responded to the worst recession since the Great Depression. President Bush had to respond to the 9/11 terrorist attack and hurricanes Katrina and Rita. Their required responses came with economic price tags.
The Four Presidents with the Worst Deficits So Far
The four presidents with the worst deficits were Barack Obama, George W. Bush, Ronald Reagan, and George H.W. Bush. The current president, Donald Trump, is on track to join that list by the end of his first term.
President Obama had the largest deficits. By the end of his final budget, FY 2017, his budget deficits totaled $6.781 trillion. That's a 58% increase.
Obama took office during the Great Recession. He immediately needed to spend billions to stop it. He convinced Congress to add $253 billion from the economic stimulus package to Bush’s FY 2009 budget. The American Recovery and Reinvestment Act added another $534 billion over the rest of Obama’s terms.
Both Presidents Bush and Obama suffered from higher mandatory spending than their predecessors did. Social Security and Medicare benefits were eating up more of the budget. Health care costs were rising as the American population aged.
In 2010, Obama signed the Patient Protection and Affordable Care Act. It sought to reduce health care spending. The Congressional Budget Office and the Joint Committee on Taxation estimated that the legislation would reduce federal deficits by $337 billion between 2017 and 2026.
George W. Bush
President Bush took office in 2001. He racked up $3.293 trillion in deficits, a 57% increase.
He responded to the 9/11 attacks with the War on Terror. That raised military spending. The Bush tax cuts addressed the 2001 recession. Unfortunately, the cuts did not sunset when the recession was over. That depleted revenues during the 2008 recession. Bush attacked the financial crisis with the bank bailout. Congress added the bailout to the mandatory budget. There it became the Troubled Asset Relief Program (TARP).
President Reagan took office in 1981. He added $1.412 trillion in deficits, and almost doubled the debt. He fought the 1982 recession by getting the Economic Recovery Tax Act of 1981 passed. It reduced the highest marginal income tax rate from 70% to 50%. The Act reduced the corporate income tax for companies with taxable income of $50,000 or less.
Reagan also increased government spending by 2.5% a year. That included a 35% increase in the defense budget and an expansion of Medicare.
George H.W. Bush
President George H.W. Bush took office in 1989, accumulating $1.036 trillion in deficits in one term. He responded to Iraq's invasion of Kuwait with Desert Storm. He oversaw the bailout plan that ended the 1989 Savings and Loan crisis. The final cost of resolving failed S&Ls is estimated at just over $160 billion. The 1991 recession cut into tax revenue.
President Trump took office in 2017. According to the FY 2021 budget, his budget deficits will total $3.812 trillion in his first term, a 19% increase. If he wins a second term, that figure will rise to $7.097 trillion, a 35% increase. He would then become the biggest spender of all presidents.
The Congressional Budget Office predicted that the COVID-19 pandemic would raise the FY 2021 deficit to $2.1 trillion. The FY 2020 deficit will be $3.7 trillion.
During the last year of his term, the COVID-19 pandemic broke out. It caused the 2020 stock market crash and recession. Trump declared a state of emergency in March, suggesting people should shelter-in-place. Many businesses closed, some for good. Congress passed the $2 trillion CARES Act, along with other stimulus measures. The combination of reduced tax receipts and stimulus spending created the record deficit levels.
What Budget Deficits Hide
Each year's deficit adds to the debt. But the total amount a president adds to the debt each year is usually more than the deficit. All presidents can employ a sleight of hand to reduce the appearance of the deficit. They can borrow from federal retirement funds in off-budget transactions. For example, the Social Security Trust Fund has run a surplus since 1987. There were more working people contributing via payroll taxes than retired people withdrawing benefits. The Fund invests its surplus in U.S. Treasury notes.
The president can reduce the deficit by spending these funds instead of issuing new Treasurys. That makes the deficit by year less than what's added to the debt by year.
For example, $8.588 trillion was added to the national debt under Obama. But his total budget deficits totaled $6.781 trillion. Similarly, President Bush's stated budget deficits totaled $3.293 trillion. But he added $5.849 trillion to the debt. Having said that, the presidents with the highest deficits are still the presidents who contributed the most to the debt.
List of Presidents' Budget Deficits by Fiscal Year
Although most other presidents ran deficits, none came close to the four detailed above. Part of that is because the U.S. economy, as measured by gross domestic product, was so much smaller for other presidents. For example, by the end of 1981, GDP was only $3.2 trillion, one-fifth the roughly $16.3 trillion GDP by the end of 2012. Below are each president's annual budget deficits since Woodrow Wilson.
President Donald Trump: Total Actual plus Budgeted = $3.812 trillion, a 19% increase.
- FY 2021 - $966 billion.
- FY 2020 - $1.083 trillion.
- FY 2019 - $984 billion.
- FY 2018 - $779 billion.
President Barack Obama: Total = $6.781 trillion, a 58% increase.
- FY 2017 - $665 billion. Although Trump requested additional spending, Congress did not approve it.
- FY 2016 - $585 billion.
- FY 2015 - $442 billion.
- FY 2014 - $485 billion.
- FY 2013 - $680 billion.
- FY 2012 - $1.077 trillion.
- FY 2011 - $1.300 trillion.
- FY 2010 - $1.5 trillion. This is the sum of $1.294 trillion plus $253 billion from the Obama Stimulus Act that was attached to the FY 2009 budget
President George W. Bush: Total = $3.293 trillion, a 57% increase.
- FY 2009 - $1.16 trillion. This amount is calculated from $1.413 trillion minus $253 billion from Obama's Stimulus Act.
- FY 2008 - $459 billion.
- FY 2007 - $161 billion.
- FY 2006 - $248 billion.
- FY 2005 - $318 billion.
- FY 2004 - $413 billion.
- FY 2003 - $378 billion.
- FY 2002 - $158 billion.
President Bill Clinton: Total = $63 billion surplus, a 1% decrease.
- FY 2001 - $128 billion surplus.
- FY 2000 - $236 billion surplus.
- FY 1999 - $126 billion surplus.
- FY 1998 - $69 billion surplus.
- FY 1997 - $22 billion.
- FY 1996 - $107 billion.
- FY 1995 - $164 billion.
- FY 1994 - $203 billion.
President George H.W. Bush: Total = $1.036 trillion, a 36% increase.
- FY 1993 - $255 billion.
- FY 1992 - $290 billion.
- FY 1991 - $269 billion.
- FY 1990 - $221 billion.
President Ronald Reagan: Total = $1.412 trillion, a 142% increase.
- FY 1989 - $153 billion.
- FY 1988 - $155 billion.
- FY 1987 - $150 billion.
- FY 1986 - $221 billion.
- FY 1985 - $212 billion.
- FY 1984 - $185 billion.
- FY 1983 - $208 billion.
- FY 1982 - $128 billion.
President Jimmy Carter: Total = $253 billion, a 36% increase.
- FY 1981 - $79 billion.
- FY 1980 - $74 billion.
- FY 1979 - $41 billion.
- FY 1978 - $59 billion.
President Gerald Ford: Total = $181 billion, a 38% increase.
- FY 1977 - $54 billion.
- FY 1976 - $74 billion.
- FY 1975 - $53 billion.
President Richard Nixon: Total = $70 billion, a 20% increase.
- FY 1974 - $6 billion.
- FY 1973 - $15 billion.
- FY 1972 - $23 billion.
- FY 1971 - $23 billion.
- FY 1970 - $3 billion.
President Lyndon B. Johnson: Total = $36 billion, an 11% increase.
- FY 1969 - $3 billion surplus.
- FY 1968 - $25 billion.
- FY 1967 - $9 billion.
- FY 1966 - $4 billion.
- FY 1965 - $1 billion.
President John F. Kennedy: Total = $18 billion, a 6% increase.
- FY 1964 - $6 billion.
- FY 1963 - $5 billion.
- FY 1962 - $7 billion.
President Dwight Eisenhower: Total = $15 billion, a 6% increase.
- FY 1961 - $3 billion.
- FY 1960 - $0 billion with a slight surplus.
- FY 1959 - $13 billion.
- FY 1958 - $3 billion.
- FY 1957 - $3 billion surplus.
- FY 1956 - $4 billion surplus.
- FY 1955 - $3 billion.
- FY 1954 - $1 billion.
President Harry Truman: Total = $5 billion, a 2% increase.
- FY 1953 - $6 billion.
- FY 1952 - $2 billion.
- FY 1951 - $6 billion surplus.
- FY 1950 - $3 billion.
- FY 1949 - $1 billion surplus.
- FY 1948 - $12 billion surplus.
- FY 1947 - $4 billion surplus.
- FY 1946 - $16 billion.
President Franklin D. Roosevelt: Total = $194 billion, a 186% increase.
- FY 1945 - $48 billion.
- FY 1944 - $48 billion.
- FY 1943 - $55 billion.
- FY 1942 - $21 billion.
- FY 1941 - $5 billion.
- FY 1940 - $3 billion.
- FY 1939 - $3 billion.
- FY 1938 - $0 billion with a slight deficit.
- FY 1937 - $2 billion.
- FY 1936 - $4 billion.
- FY 1935 - $3 billion.
- FY 1934 - $4 billion.
President Herbert Hoover: Total = $5 billion, a 30% increase.
- FY 1933 - $3 billion.
- FY 1932 - $3 billion.
- FY 1931 - $0 billion (slight deficit).
- FY 1930 - $1 billion surplus.
President Calvin Coolidge: Total = $5 billion surplus, a 26% decrease.
- FY 1929 - $1 billion surplus.
- FY 1928 - $1 billion surplus.
- FY 1927 - $1 billion surplus.
- FY 1926 - $1 billion surplus.
- FY 1925 - $1 billion surplus.
- FY 1924 - $1 billion surplus.
President Warren G. Harding: Total = $1 billion surplus, a 6% decrease.
- FY 1923 - $1 billion surplus.
- FY 1922 - $0 billion with a slight surplus.
President Woodrow Wilson: Total = $22 billion, a 775% increase.
- FY 1921 - $1 billion surplus.
- FY 1920 - $0 billion with a slight surplus.
- FY 1919 - $13 billion.
- FY 1918 - $9 billion.
- FY 1917 - $1 billion.
- FY 1916 - $0 billion with a slight surplus.
- FY 1915 - $0 billion with a slight surplus.
- FY 1914 - $0 billion.
FY 1789 - FY 1913 - $1 billion surplus.
(Source: Office of Management and Budget, "Table 1.1—Summary of Receipts, Outlays, and Surpluses or Deficits: 1789–2021."
USA.gov. "Budget of the U.S. Government." Accessed Jan. 31, 2020.
U.S. House of Representatives; History, Art and Archives. "Power of the Purse." Accessed Jan. 31, 2020.
Congressional Budget Office. "What Is the Difference Between Mandatory and Discretionary Spending?" Accessed Jan. 31, 2020.
Committee for a Responsible Federal Budget. "Q&A: Everything You Should Know About Government Shutdowns." Accessed Jan. 31, 2020.
Treasury.gov. "The Financial Crisis Response in Charts April 2012," Page 4. Accessed Jan. 31, 2020.
Congressional Budget Office. "Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output in 2014." Accessed Jan. 31, 2020.
HealthCare.gov. "Patient Protection and Affordable Care Act." Accessed Jan. 31, 2020.
Congressional Budget Office. "American Health Care Act," Page 1. Accessed Jan. 31, 2020.
TreasuryDirect.gov. "The Debt to the Penny and Who Holds It." Accessed Jan. 31, 2020.
George Bush White House Archives. "President Bush's Tax Relief." Accessed Jan. 31, 2020.
U.S. Department of Treasury. "Troubled Asset Relief Program." Accessed Jan. 31, 2020.
FRED. " Federal Surplus or Deficit." Accessed Jan. 31, 2020.
Congress.gov. "H.R.4242 - Economic Recovery Tax Act of 1981." Accessed Jan. 31, 2020.
FDIC.gov. "History of the Eighties," Page 187. Accessed Jan. 31, 2020.
University of California, Berkeley. "Slaying the Dragon of Debt,1990-92 Early 1990s Recession." Accessed Jan. 31, 2020.
The White House. “A Budget for America’s Future: FY 2021,” Table S-4. Accessed March 2, 2020.
Social Security. "Social Security Income, Cost, And Asset Reserves." Accessed Jan. 31, 2020.
Office of Management and Budget. “Historical Tables,” Download Table 1.1 - Summary of Receipts, Outlays, and Surpluses or Deficits: 1789-2021. Accessed March 2, 2020.
FRED, Federal Reserve Bank of St. Louis. "Gross Domestic Product (GDP)." Accessed Jan. 31, 2020.