FY 2018 Federal Budget: Trump's First Budget

Compare Congress' Enacted Budget to Trump's Requests

Trump State of the Union
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The fiscal year 2018 federal budget outlines U.S. government revenue and spending from October 1, 2017 through September 30, 2018. The budget process began when President Trump submitted his budget. In January 2018, Congress enacted the appropriation bills to guide spending.

The Office of Management and Budget estimates that revenue will be $3.340 trillion. That's less than the planned spending of $4.173 trillion.

It will create a $833 billion budget deficit


Half of the FY 2018 revenue of $3.340 trillion comes from income taxes. They contribute $1.660 trillion. Payroll taxes are $1.179 trillion, and include Social Security and Medicare taxes. Corporate taxes add $218 billion, contributing just 7 percent. Trump's tax plan cut the corporate contribution from 9 percent.

The remaining $283 billion is from excise taxes, estate taxes, interest on Federal Reserve deposits, and other miscellaneous sources. It's also lower than in FY 2017. The tax plan cut estate taxes.  Also, the Federal Reserve is reducing its holdings of U.S. Treasurys

Tax Freedom Day occurs in late April. That's how long taxpayers work to pay for federal state, and local government revenue collected. It's more than they spend on food, clothing, and housing combined.


The budget office estimates the federal government will spend $4.173 trillion in FY 2018.

Government spending has three components: discretionary, mandatory and interest on the debt. 

Discretionary: Congress appropriate funds each year for agencies covered by the discretionary budget. 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.

Here is a breakdown of discretionary spending. The first column shows Trump's budget request. The second column shows OMB's estimate of FY 2018 spending. The third column shows what Congress enacted on September 19, 2018. The House and Senate appropriation committees will determine the exact amounts.

It's clear from the chart that Congressional appropriations could push actual spending above OMB's estimate. It depends on how much Congress allocates for Emergency Funding. Most of that goes toward Overseas Contingency Operations, which pays for military operations in the Middle East. It also goes toward disaster relief. In 2017, Congress added $15 billion in emergency funds for Hurricane Harvey and $19.5 billion for Hurricane Irma.


FY 2018 Budget: Trump's Budget Request, Estimate, and Appropriation by Congress (in billions)

DepartmentRequest EstimatedAppropriated
Defense Dept   $574.5   $574.5    $584.2
Education     $59.0     $67.8Unknown
Energy     $28.0     $30.0     $37.6*
    NNSA     $13.9     $12.8      $12.9
Health     $65.3     $86.3    $157.9*
Homeland     $44.1     $44.1      $51.1
HUD     $31.2     $37.4     $56.5*
NASA     $19.1     $19.5Unknown
State     $28.2     $38.1      $35.5
VA     $78.8     $77.3     $88.2*
All Other Depts.   $131.9     $90.0    $130.0
Subtotal$1,065.0$1,065.0 $1,141.0
Emergency Funding     $85.3   $154.1Unknown
Total Discretionary$1,150.3$1,219.1 

* Includes other departments.

Mandatory: The budget office estimates mandated benefits will cost $2.593 trillion. The mandatory budget is an estimate, not an appropriation.

Congress can't change it as part of the normal budget process. Congress mandated the benefit payments when it passed the laws that created the programs. The most recent estimates are from the FY 2019 budget.

  • Social Security: $987 billion. Payroll taxes fund 100 percent of the cost.
  • Medicare: $582 billion. Payroll taxes and premiums fund 57 percent of the cost.
  • Medicaid: $400 billion. Paid out of the general fund.
  • All Other: $624 billion. This includes food stamps and Supplemental Security Income. Most are paid out of the general fund. Unemployment Compensation is partially funded by payroll taxes. The Affordable Care Act and TARP are self-funded.

Interest on the DebtInterest payments on the national debt are not officially part of the mandatory budget, but the payments must be made. The budget office estimates it will be $310 billion in FY 2018. It's $50 billion more than 2017 because both the national debt and interest rates are rising


The FY 2018 deficit is projected at $833 billion. It's almost double the $440 billion that Trump originally budgeted. One reason for the discrepancy is that revenue came in $100 billion less than than expected. The other is that spending was $4.173 trillion, almost $100 billion more than budgeted.

The deficit was the fifth-highest U.S. deficit by year. It made Trump the third-highest deficit by president, following Obama and Bush. The CBO projects that the Congressional budget deal could boost the deficit to $1.2 trillion in FY 2019.

FY 2018 (in billions)Budget RequestEstimated
Revenue $3,654 $3,340
Mandatory$2,535 $2,593 
Interest on the Debt   $315   $310 
Discretionary$1,244 $1,219 
Total Spending $4,094 $4,173
Deficit    $440    $833


Compare to Other U.S. Federal Budgets