Treasury Secretary Steven Mnuchin and White House budget chief Mick Mulvaney on Friday blamed lukewarm economic growth for the 2017 budget deficit.
“Today’s budget results underscore the importance of achieving robust and sustained economic growth,” Mnuchin said of the budget deficit, which came to 3.5 percent of the GDP.
The $666 billion for the 2017 fiscal year, which closed at the end of September, was $80 billion more than the previous year. It was also $36 billion less than July estimates predicted.
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“These numbers should serve as a smoke alarm for Washington, a reminder that we need to grow our economy again and get our fiscal house in order. We can do that through smart spending restraint, tax reform and cutting red tape,” Mulvaney said.
The Trump administration has made economic a growth a centerpiece of its agenda, but many economists warn that its promises of 3 percent growth or higher may be out of reach.
A particularly harsh hurricane season is likely to dramatically dampen third quarter growth, but could lead to a later resurgence as funds are spent on rebuilding and businesses resume operation.
While the 2017 spending plan should have been in place before Trump came into office four months into the fiscal year, the government instead operated on short-term funding measures that continued 2016 spending levels until May.
That spending authorization was set to run out come October, but the spending deadline was extended until early December.
The Senate on Thursday passed its fiscal 2018 budget, which is expected to be taken up by the House next week.
The budget laid out a plan for eliminating the deficit that relied on cutting Medicaid and Medicare by hundreds of billions of dollars. It also paved the way for $1.5 trillion in deficit-financed tax cuts.
The budget’s primary purpose at this point in the year is to lay the groundwork for tax reform, the GOP’s top legislative agenda item.
There is little clarity on what the final spending numbers for 2018 will be come December, with Republicans needing Democratic support in the Senate to pass spending bills.
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