The annual budget deficit had been reduced to $585 billion by the end of former President Barack Obama's second term in 2016 and Republicans in Congress during that time criticized Obama, a Democrat, for not reducing it further. Since then, the budget deficit has jumped due in part to the Republican's overhaul of the tax system, which in the short term
sharply reduced corporate tax income revenues, and an increase in military spending. By the end of fiscal 2019, corporate tax payments were up 5%. Customs duties, which have been affected by the Trump administration's trade war with China and others, were up 70% year-on-year. There was higher spending on defense, healthcare and social security programs. The United States has an ageing population and economists have warned that the cost of mandatory spending on Social Security and Medicare as well as federal retirement programs for the elderly will be fiscally unsustainable.
Earlier this year the US Congress passed a two-year budget deal backed by Trump that would increase federal spending on defense and other domestic programs. Some of the widening of the deficit came from more spending on interest payments on the national debt. Borrowing has increased over the past year.
For September, the US government recorded a $83 billion surplus, a 31% drop from the same month last year. When accounting for calendar adjustments, the surplus last month was $17 billion compared with an adjusted surplus of $51 billion the previous year. For the fiscal year, the adjusted deficit was $1 trillion. Outlays were $291 billion in September, up 30% from the same month a year earlier while receipts totaled $374 billion, an increase of 9% from the year-ago month.