FY 2018 Federal Budget: Enacted Versus Trump's Budget Request

Compare Congress' Enacted Budget to Trump's Requests

Table of Contents
Table of Contents

The fiscal year 2018 federal budget outlines U.S. government revenue and spending from Oct. 1, 2017, through Sept. 30, 2018. It was the first fiscal year to which Trump's tax plan applied. The budget process began when President Donald Trump submitted his budget. In January 2018, Congress enacted a bill to guide spending for the next two years. On March 23, 2018, it passed the Omnibus Spending Bill that outlined appropriations for specific departments.

The Office of Management and Budget estimated that revenue would be $3.65 trillion. That's less than the planned spending of $4.09 trillion, creating a $440 billion budget deficit. With hindsight, we now know that it created a budget deficit of $779 billion.

Revenue

Roughly half of the FY 2018 revenue of $3.65 trillion came from income taxes. They contributed $1.836 trillion. Payroll taxes—that is, Social Security and Medicare taxes—totaled $1.162 trillion. Corporate taxes added $355 billion.

The roughly $300 billion in remaining revenue came from excise taxes, estate taxes, unemployment insurance, interest on Federal Reserve deposits, and other miscellaneous sources. The tax plan cut estate taxes. Also, the Federal Reserve was reducing its holdings of U.S. Treasurys at the time.

Spending

The budget office estimated the federal government would spend $4.094 trillion in FY 2018. Government spending has three components: discretionary, mandatory, and interest on the debt

On Feb. 9, 2018, Congress approved a $1.208 trillion discretionary spending bill for FY 2018. It's less than President Trump's $1.244 request, but it's more than the $1.065 trillion allowed by sequestration. It includes $629 billion for defense. That's $80 billion more than the $549 billion allowed by sequestration. It also includes $579 billion for all other non-defense discretionary spending. That's $63 billion more than the sequestration limit of $516 billion.

The Congressional bill laid out top-line spending for two years, FY 2018 and FY 2019. It specified non-defense spending such as $80 billion for disaster relief, $20 billion for infrastructure, and $7 billion for Community Health Centers. It included an additional $6 billion for opioid treatment, $5.8 billion for Child Care block grants, and $4 billion to the Department of Veterans Affairs.

The spending bill only addressed one of the budget's components. It added funds to the base budget, which pays for standard department operations. Trump's budget kept it within the sequester's limit of $1.065 trillion for FY 2018.

For FY 2018, the spending bill exceeded the caps imposed by sequestration. The bill covered FY 2018 and FY 2019. Republicans increased defense spending by $83 billion a year. Sequestration limited it to $549 billion. Democrats added $60 billion a year for nondefense discretionary spending. That's above the sequestration limit of $516 billion. The bill included $80 billion in disaster relief and $6 billion to treat opioid addiction. It also included $7 billion to fund community health centers for two years. Tax provisions added $17 billion. The Congressional Budget Office found that the budget will add $320 billion to the debt over the next 10 years—$418 billion once you factor in interest costs.

Spending outlined in the budget is often complicated by natural disasters and other emergencies. For example, in 2017, Congress spent extra emergency funds in response to Hurricane Harvey and Hurricane Irma.

Interest payments on the national debt are not officially part of the mandatory budget, but the payments must be made. In 2018, interest payments cost the federal government $523 billion. That's roughly $64.5 billion more than interest payments in 2017. At the time, both debt and interest rates were rising, so interest payments were becoming more expensive.

Trump's FY 2018 Discretionary Spending

The chart below breaks down discretionary spending, as noted by the Congressional Budget Office in 2019 (in billions).

Department Spending
Defense Operation and Maintenance $255
Military Personnel $139
Military Procurement $113
Military Research, Development, etc. $77
Other Defense $39
Education, Training, Employment, and Social Services $93
Transportation $92
Veterans' Benefits and Services $78
Income Security $69
Health $61
Administration of Justice $56
International Affairs $50
Other Nondefense $139
Defense Dept (total) $623
Nondefense (total) $639
Total Discretionary $1,150.3

Deficit

At the time, the roughly $779 billion deficit created by the FY2018 budget was the fifth-highest U.S. deficit by year. It made Trump the third-highest deficit by president, following Obama and Bush.

Here's how the 2018 deficit compared to other years:

Deficit Year-Over-Year Change
2009 $1.4 trillion $1 trillion
2010 $1.29 trillion -$110 billion
2011 $1.3 trillion $10 billion
2012 $1.08 trillion -$220 billion
2013 $680 billion -$400 billion
2014 $485 billion -$195 billion
2015 $442 billion -$43 billion
2016 $585 billion $143 billion
2017 $666 billion $81 billion
2018 $779 billion $113 billion
2019 $984 billion $205 billion
2020 $3.13 trillion $2.146 trillion