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US budget deficit soars to highest rate since 2012

Expected to grow to $1 trillion, the figure spiked 26 per cent within the last year

Alex Woodward
New York
Friday 25 October 2019 16:26 EDT
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People walk into a meeting of the Board of Governors at the Federal Reserve, October 24, 2013
People walk into a meeting of the Board of Governors at the Federal Reserve, October 24, 2013 (Getty)

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The US federal deficit has soared to $984 billion, marking a $205 billion - or 26 per cent - increase within the last year and demonstrating a failure of conservative leadership to balance a climbing deficit.

Now inheriting the highest deficit in seven years, Donald Trump has committed billions of dollars to expanding military budgets while allowing a dramatic drop in revenue with a 2017 tax cut that largely benefited the country's highest-earning households.

The latest projections, which calculate revenue coming in against expenses, predict an incoming deficit of $1 trillion, which the Congressional Budget Office expects will continue to rise over the next decade.

Rising deficit figures sharply contrast Mr Trump's pledges to eliminate the deficit within eight years without increasing tax revenue, among the president's abandoned campaign promises.

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Within the last fiscal year, the federal government spent $4.4 trillion but brought in $3.5 trillion through taxes and other sources of revenue.

The highest deficit was $1.4 trillion and came in 2009, when then president Barack Obama and Congress were trying to navigate the banking crisis and the resulting global recession with extra spending. It had come down to $585 billion by the time Obama left office in January, 2017.

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