FY 2019 Federal Budget: Trump’s Budget Request

Compare Congress’ Enacted Budget to Trump’s Request

The fiscal year 2019 federal budget outlines U.S. government revenue and spending from October 1, 2018, through September 30, 2019. The budget process began when President Donald Trump submitted his budget. In February 2018, Congress enacted a bill to guide spending for FY 2019 as well as FY 2018.

The Office of Management and Budget estimated that revenue will be $3.438 trillion. That's less than the planned spending of $4.529 trillion and will create a $1.092 trillion budget deficit.

Revenue

Almost half of the FY 2019 revenue of $3.422 trillion comes from income taxes. They contribute $1.698 trillion. Payroll taxes are $1.242 trillion and include Social Security and Medicare taxes. Corporate taxes add $216 billion, contributing just 7% to the total revenue. The corporate contribution was brought down from 9% in FY 2016 by Trump's tax plan.

The remaining $280 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.

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

Spending

The budget office estimates the federal government will spend $4.536 trillion in FY 2019. 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. It typically uses the president’s request as a guideline. But on February 9, 2018, Congress did something a little different. It approved a two-year discretionary spending bill for both Fiscal Years 2018-2019. The bill outlined spending targets for the base budget that covers standard department operations. The appropriations committees allocated funding based on that spending bill.

Nevertheless, the Trump administration released its budget request for FY 2019 on February 12, 2018. It is shown below next to the estimated spending based on the Congressional allocations.

Mandatory: The budget office estimates mandatory benefits will cost $2.777 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.

  • Social Security: $1.041 billion. Payroll taxes fund 100% of the cost.
  • Medicare: $645 billion. Payroll taxes and premiums fund 57% of the cost.
  • Medicaid: $419 billion. Paid out of the general fund.
  • All Other: $672 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 on the Debt: 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 $393 billion in FY 2019. It's 21% more than in 2018 because both the national debt and interest rates have risen.

Deficit

The FY 2019 deficit is projected at $1.091 trillion. It’s a 40% increase over FY 2018. It’s the largest deficit since FY 2012.

Compare to Past Budgets

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