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.
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
President Barack Obama had the largest deficits. When Obama took office in 2009, the federal budget deficit was $10.6 trillion. By the time he left office in 2017, the federal budget deficit had nearly doubled to $19.9 trillion. That's an increase of about 86%.
Obama had to deal with the Great Recession. In 2009, Obama signed the American Recovery and Reinvestment Act. It is estimated to have increased the budget deficit to nearly $840 billion through 2019.
Federal income decreased due to lower tax receipts from the 2008 financial crisis.
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.
President George W. Bush took office in 2001 when the budget deficit was $5.7 trillion. When he left office in 2009, the deficit was $10.6 trillion.
He responded to the 9/11 attacks with the War on Terror. That raised military spending. The Bush tax cuts, also known as the Economic Growth and Tax Relief Reconciliation Act and Jobs and Growth Tax Relief Reconciliation Act, cut taxes to address the 2001 recession. Unfortunately, the cuts did not sunset when the recession was over. That worsened the housing boom and depleted revenues during the 2008 recession. He attacked the 2008 financial crisis with the $700 billion bailout. Congress added the bailout to the mandatory budget. There it became the Troubled Asset Relief Program (TARP).
President Ronald Reagan took office in 1981 and the federal deficit was $79 billion. When he left office in 1989, the deficit was $153 billion. He fought the 1982 recession by getting the Economic Recovery Tax Act of 1981 passed. It reduced the highest marginal tax rate for all types of income to 50% from 70%.
The Act reduced the corporate income tax for corporations with taxable income of $50,000 or less.
President George H.W. Bush took office in 1989, and the deficit was $153 billion. When he left office in 1993, the deficit was $255 billion. He had to deal with 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 Donald Trump took office in 2017 and the deficit was $665 billion.
According to the Congressional Budget Office, in fiscal year 2019 ending Sept. 30, 2019, the budget deficit totaled $984 billion. That was $205 billion more than the shortfall recorded in 2018. Measured as a share of GDP, the deficit increased to 4.6% in 2019. That up from 3.8% in 2018 and 3.5% in 2017.
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, $9.3 trillion was added to the national debt under Obama. But his total budget deficits totaled $6.785 trillion. Similarly, President Bush's stated budget deficits totaled $3.294 trillion. But he added $5.849 trillion to the debt. Having said that, the president with the highest deficits are still the presidents who contributed the most to the debt. It's ironic that, as the debt has increased through the years, the value of presidents' salaries has decreased.
The chart below shows a breakdown of the top 10 U.S. presidents with the biggest debt increases.
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, in 1981 GDP was only $3 trillion, one-fifth the $15 trillion GDP in 2012. Below are each president's annual budget deficits since Woodrow Wilson.
President Donald Trump: Total Actual plus Budgeted = $4.040 trillion, a 20% increase. That's one reason why so many argue that Trump may not be better than Obama for the economy. Trump did not have to fight a recession during his term. It's usually better to have contractionary fiscal policy during an expansion instead of adding to the nation's debt.
- FY 2021 - $1.068 trillion.
- FY 2020 - $1.101 trillion.
- FY 2019 - $1.092 trillion.
- FY 2018 - $779 billion.
President Barack Obama: Total = $6.785 trillion, a 57% increase.
- FY 2017 - $666 billion. Although Trump requested additional spending, Congress did not approve it.
- FY 2016 - $585 billion.
- FY 2015 - $438 billion.
- FY 2014 - $485 billion.
- FY 2013 - $679 billion.
- FY 2012 - $1.087 trillion.
- FY 2011 - $1.300 trillion.
- FY 2010 - $1.547 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: "Table S-5. Mid-Session Review Fiscal Year 2017," Office of Management and Budget, July 15, 2016. "Table 1.1—Summary of Receipts, Outlays, and Surpluses or Deficits: 1789–2021," Office of Management and Budget.)
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