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.
However, 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 in office.
A better way to calculate the deficit is by looking at each president’s budget and then adding the deficits for those budgets.
- A budget deficit results when the revenue from taxes is less than spending in a fiscal year.
- Presidents influence the debt through policy decisions, but they can't control mandatory spending enacted by Congress.
- The four presidents with the biggest deficits have been Barack Obama, Donald Trump, George W. Bush, and Ronald Reagan.
4 Factors That Influence the Deficit
There are four factors that can influence each president's deficit.
1. Mandatory Budget
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 that any president has. The acts of Congress that created the programs determine how much must be spent. The president's budget can only estimate what these programs will cost. Unless the president gets Congress to change them, they must live with that spending.
2. Spending Control
The Constitution gave Congress—not the president—the power to control spending. The president’s budget is just a starting point. Each house of Congress also prepares a discretionary spending budget.
The two houses combine them into the final budget, which the president reviews and signs. If there's a hitch in the budget process, Congress can keep federal agencies running at current budget levels with a continuing resolution, or else federal agencies will shut down .
There have been four shutdowns that lasted more than one business day. The first two happened in the winter of 1995-1996, and the third was in 2013. The fourth shutdown started in December 2018 and continued into January 2019.
3. Inherited Policies
Presidents inherit their predecessors' policies. For example, presidents will have lower revenue from predecessors' tax cuts. They also must manage social programs initiated by prior acts of Congress.
4. Catastrophic Events
Some presidents have to confront catastrophic events. President Obama faced the 2008 financial crisis. President George W. Bush had to respond to the 9/11 terrorist attack and hurricanes Katrina and Rita. These responses came with economic price tags.
The 4 Presidents With the Worst Deficits So Far
The four presidents with the worst deficits have been Barack Obama, Donald Trump, George W. Bush, and Ronald Reagan.
President Obama had the largest deficits. By the end of his final budget, FY 2017, his budget deficits totaled $6.781 trillion over his eight years in office. That's a 58% increase from President George W. Bush's last budget.
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 an additional $534 billion over the rest of Obama’s terms.
Both President Obama and President Bush were subject to higher mandatory spending than their predecessors were.
Social security and Medicare benefits were eating up more of the budget, and healthcare costs were rising as the American population aged.
In 2010, Obama signed the Patient Protection and Affordable Care Act. It sought to reduce healthcare spending. The Congressional Budget Office (CBO) and the Joint Committee on Taxation estimated that the legislation would reduce federal deficits by $337 billion between 2017 and 2026.
President Trump took office in 2017. By the end of his term four years later, he was estimated to hold $6.6 trillion in deficits, a 33% increase. The CBO predicted that the COVID-19 pandemic would increase the FY 2020 deficit by $2.2 trillion and the FY 2021 deficit by $600 billion.
In March 2020, Trump declared a state of emergency as the pandemic broke out in the United States. Nonessential businesses closed, and Americans were urged to shelter in place. Congress passed the $2 trillion CARES Act, along with other stimulus measures. The combination of reduced tax receipts and increased stimulus spending created record deficit levels.
George W. Bush
President Bush took office in 2001. He racked up $3.293 trillion in deficits during his two terms, a 57% increase.
Bush responded to the 9/11 attacks with the War on Terror, which raised military spending. The Bush tax cuts addressed the 2001 recession. Unfortunately, the cuts did not sunset when the recession was over, which depleted revenues during the 2008 recession.
Bush attacked the financial crisis with the bank bailout. Congress added the bailout to the mandatory budget, where 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 during his eight years in office. He fought the 1982 recession by signing the Economic Recovery Tax Act of 1981. It reduced the highest marginal income tax rate from 70% to 50% and reduced the corporate income tax for small companies with taxable incomes of $50,000 or less.
Reagan also increased government spending by 2.5% per year. That included a 35% increase in the defense budget and an expansion of Medicare.
What Budget Deficits Hide
All presidents can employ sleight of hand to reduce the appearance of the deficit. They can borrow from federal retirement funds in off-budget transactions.
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.
For example, the Social Security Trust Fund has run a surplus since 1987. There have been 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 President Obama. But his total budget deficits totaled $6.781 trillion.
Similarly, President Bush's stated budget deficits totaled $3.293 trillion. But Bush added $5.849 trillion to the debt. The presidents who had the highest deficits are still those who contributed the most to the debt.
List of Presidents' Budget Deficits by Fiscal Year
Although most other presidents have run deficits, none has yet came close to the four detailed above. One partial explanation is that the U.S. economy, as measured by gross domestic product (GDP), was so much smaller for other presidents.
For example, by the end of 1981, GDP was only $3.2 trillion, one-fifth of 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 = $6.612 trillion, a 33% increase
- FY 2021: $966 billion budgeted + $600 billion from pandemic impact = $1.566 trillion
- FY 2020: $1.083 trillion budgeted + $2.2 trillion from pandemic = $3.283 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 and $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 through FY 1913: $1 billion surplus
Frequently Asked Questions (FAQs)
Have any presidents not had a deficit?
Various presidents have had individual years with a surplus instead of a deficit. Most recently, Bill Clinton had four consecutive years of surplus, from 1998 to 2001. Since the 1960s, however, most presidents have posted a budget deficit each year.
What causes a budget deficit?
In the most basic sense, a budget deficit is a result of spending more than anticipated, dealing with unexpected revenue shortfalls, or some combination of both. This could happen as a result of a natural disaster, a recession, unexpected job losses, or many other factors. In many cases, the government plans for a deficit because it hopes to use increased spending to stimulate the economy.
What does a budget deficit do to the national debt?
If there is a budget deficit, that means the national debt is also growing, because the only way to finance the deficit is to sell more government securities, thus increasing the debt. The debt is, essentially, an accumulation of each year's deficits minus any surpluses.