FY 2018 Federal Budget: Enacted Versus Trump's Budget Request
Compare Congress' Enacted Budget to Trump's Requests
The fiscal year 2018 federal budget outlines U.S. government revenue and spending from Oct. 1, 2017, through Sept. 30, 2018. 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.
Half of the FY 2018 revenue of $3.33 trillion comes from income taxes. They contribute $1.684 trillion. Payroll taxes are $1.171 trillion and include Social Security and Medicare taxes. Corporate taxes add $205 billion, contributing just 6%. Trump's tax plan cut the corporate contribution from 9% in FY 2017.
The remaining $271 billion is from excise taxes, estate taxes, interest on Federal Reserve deposits, and other miscellaneous sources. It's also lower than in FY 2016. The tax plan cut estate taxes. Also, the Federal Reserve is reducing its holdings of U.S. Treasurys.
The budget office estimated the federal government would spend $4.109 trillion in FY 2018. Government spending has three components: discretionary, mandatory, and interest on the debt.
On Feb. 9, 2018, Congress approved a $1.2 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 $576 billion for all other nondefense discretionary spending. That's $60 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 nondefense 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.
The chart below breaks down 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 Sept. 19, 2018. The fourth column details what the House and Senate appropriation committees allocated. Those details are from the Omnibus Spending bill that President Trump signed on March 23, 2018.
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. 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.
In the Omnibus bill, it added $1 billion to address the opioid epidemic, for a total of $4 billion. Congress added $10.6 billion in infrastructure spending for a total of $21 billion. It also dedicates $1.6 trillion to build 90 miles of wall on the U.S. border with Mexico. Congress added $2.3 billion across departments to school safety issues.
FY 2018 Budget: Trump's Budget Request, Estimate, and Appropriation by Congress (In Billions)
|All Other Depts.||$131.9||$90.0||$130.0||$184.0|
* Includes other departments.
The budget office estimates mandated benefits will cost $2.522 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 2020 budget, as of 2019.
- Social Security: $982 billion. Payroll taxes and the Social Security Trust Fund cover 100% of the cost.
- Medicare: $582 billion. Payroll taxes and premiums fund 57% of the cost.
- Medicaid: $389 billion. Paid out of the general fund.
- All Other: $569 billion. This includes food stamps and Supplemental Security Income. Most are paid out of the general fund. Payroll taxes partially fund Unemployment Compensation. The Affordable Care Act and TARP are self-funded.
Interest 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 $325 billion in FY 2018. It's $62 billion more than 2017 because both the debt and interest rates are rising.
The FY 2018 deficit is projected at $779 billion once the Omnibus spending bill is included. 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 expected. The other is that spending was $4.109 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)||Requested Subtotal||Requested Total||Final Estimate Subtotal||Final Estimate Total|
|Interest on the Debt||$315||$325|