The US will issue over $1.3 trillion in new debt in 2018, the highest amount since the depths of the recession
- The federal government will issue $1.34 trillion in new debt during 2018, according to a new Treasury Department projection.
- The debt issuance represents a 146% jump from 2017 and the highest amount of new debt issued since 2010.
- The report comes weeks after the Treasury said the fiscal year 2018 budget deficit hit $779 billion, the largest since 2012.
- The primary drivers of new debt issuance are the GOP tax law and the bipartisan budget agreement.
The federal government will issue more than $1.3 trillion in debt in 2018, according to a new estimate released by the Treasury Department on Monday, the highest total debt issuance since the depths of the Great Recession:
- Total net marketable securities issued in the fourth quarter will be a projected $425 billion, according to the Treasury report.
- That will bring total debt issued in 2018 to $1.34 trillion, the highest since $1.59 trillion was issued in 2010.
- 2018 debt issuance also jumped 146% from 2017, when just $546 billion was issued.
The numbers come after the Treasury announced in early October that the budget deficit for fiscal year 2018 (which ran from October 2017 through September) hit $779 billion, a 17% jump from the previous fiscal year and the highest level since 2012.
The deficit is expected to come in just shy of $1 trillion for fiscal year 2019 and will eclipse the $1 trillion mark in the following four years, according to official Trump administration estimates.
The ballooning debt load is primarily the result of newly passed legislation including the GOP tax reform law and the bipartisan budget deal.
According to the Treasury, federal revenue growth was sluggish in fiscal year 2018 primarily due to a drop in corporate tax revenue. The GOP law is expected to add $1.5 trillion in debt over the next 10 years. At the same time, higher levels of spending from the budget deal caused overall spending to jump.
Recently, Republican leaders, including members of the Trump administration, have pointed to the growing deficit as an example of why it is necessary to cut entitlement programs like Medicare and Social Security.
Democrats, on the other hand, want to reverse some provisions of the GOP tax law to increase revenue and close the gap that way.
Early polling shows that most Americans would prefer Congress deal with the deficit and debt by reversing the tax law's cuts rather than reducing spending on entitlements.