Question

Hi can you help make a summary about this short article and how it affects me economically as US citizen ?

Federal spending outpaced revenue by $317 billion over the first three months of fiscal 2019, according to the Congressional Budget Office.CreditSarah Silbiger/The New York Times

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Federal spending outpaced revenue by $317 billion over the first three months of fiscal 2019, according to the Congressional Budget Office.CreditCreditSarah Silbiger/The New York Times

By Jim Tankersley

• Jan. 8, 2019

WASHINGTON — The federal budget deficit continued to rise in the first quarter of fiscal 2019 and is on pace to top $1 trillion for the year, as President Trump’s signature tax cuts continue to reduce corporate tax revenue, data released Tuesday shows.

The monthly numbers from the Congressional Budget Office also show an increase in spending on federal debt as rising interest rates drive up the cost of the government’s borrowing.

The widening deficit comes despite a booming economy and a low unemployment rate that would typically help fill the government’s coffers. Federal spending outpaced revenue by $317 billion over the first three months of the fiscal year, which began in October, the budget office reported. That was 41 percent higher than the same period a year ago, or 17 percent after factoring in payment shifts that made the fiscal 2018 first-quarter deficit appear smaller than it actually was.

The report did show one area of increasing revenue — from Mr. Trump’s sweeping tariffs. Revenue from levies on imported steel, aluminum and Chinese goods were up $8 billion from the same quarter a year ago, an 83 percent increase. That increase, however, is nowhere close to the levels needed to support Mr. Trump’s frequent claims that his tariffs will help pay down the national debt.

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This fiscal year is the first to fully incorporate the reduced tax rates that Mr. Trump signed into law in late 2017, including cuts for individuals and closely held businesses and steep reductions for corporations. It continued a trend from the final three quarters of 2018, after the tax cuts took effect: falling tax receipts, at a time of relatively strong economic growth — a combination that shows the tax cuts are achieving nothing close to the administration’s promise that they would pay for themselves.

Corporate tax receipts fell by $9 billion for the quarter, or 15 percent. Individual receipts fell by $17 billion, or 4 percent. Interest costs on the debt rose by $16 billion for the quarter, or 19 percent. Interest costs for December were up 47 percent from the same month in 2017.

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“It is entirely predictable and utterly depressing,” said Maya MacGuineas, the president of the Committee for a Responsible Federal Budget, which advocates deficit reduction. “At a time when we should be working to keep the strong economy going and bring our debt down, our lawmakers seem unwilling to pay for anything and they just keep adding to the debt. All signs point to that it will continue to get worse before it gets better.”

Karl Smith, a senior fellow at the Niskanen Center, a think tank in Washington, welcomed the numbers as a sign that American fiscal policy is continuing to boost growth and encourage investment, as the economy encounters challenges including Mr. Trump’s trade war with China.

“The U.S. is facing headwinds from a global slowdown,” Mr. Smith said, “and needs both the stimulus of high deficits and an incentive to keep corporations expanding through what’s likely to be a rough patch of uncertainty, if not outright global recession.”

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Some of that uncertainty stems from the ongoing partial shutdown of the federal government, which show no signs of ending. Among other disruptions, the shutdown has slowed the release of the Treasury Department’s own monthly deficit estimates. They were scheduled to be released later this week. But a note on the department’s website says that release will now be determined when the shutdown ends.

A version of this article appears in print on Jan. 8, 2019, on Page B3 of the New York edition with the headline: U.S. Deficit Is on Track To Reach $1 Trillion. Order Reprints | Today’s Paper | Subscribe

Answer 1

The article provided in the question can be summarised as follows:-

The current U.S government spending is $4.407 trillion which is the Federal Budget for the fiscal year 2019. Before the recession, the government kept Federal spending below 20 percent of GDP. It grew no faster than the economy. On average, growth was 2-3 percent per year. During the recession, spending grew to a record 24.4 percent of GDP in the financial year 2012. The government spent more on economic stimulus and engaged in two overseas wars.

But at the same, growth slowed. That reduced tax receipts. Congress worried about the ballooning U.S debt. No one can agree on how to reduce it. As a result, Congress enacted a 10 percent budget cut, called sequestration. That finally reduced spending to 20.7 percent of GDP in the Financial year 2015. Since then, spending has started creeping up again despite the sequester.

Almost two -thirds of federal spending pay Social Security. Medicare and Medicaid benefits. These are a part of mandatory spending. Those are the programs established by prior acts of Congress. The mandatory budget will cost $2.739 trillion in the Financial year 2019.

While Social security costs the most at $1.046 trillion. Current payroll taxes provide $905 billion of the income. Interest from the Social Security Trust Fund pays for the rest. But the costs will outpace income by 2030. That means Social Security benefits will drain the general fund. It also means Congress can no longer "borrow" from the Social Security Trust Fund to pay for other federal programs.

Discretionary spending is $1.305 trillion. It pays for everything else. Congress decides how much to appropriate for these programs each year. That means it's the only government spending that Congress can cut. There is an additional fund for emergencies. Congress allocates this outside of the budget subject to sequestration. For FY 2019, the emergency fund is $111.4 billion. The largest component is for Overseas Contingency Operations, which is for wars.

Once you include the OCO fund, then military spending is $886 billion. It's spread out among different agencies and budget categories, so you must add it all together. It includes:

-Defense Department base budget :$597.1 billion.

- DoD Overseas Contingency Operations: $88.9 billion.

-Departments that support defense :$181.3. They include the Department of Veteran Affairs, State Department, Homeland Security, FBI and Cybersecurity and the National Nuclear Security Administration.

-Emergency funding for support departments: $ 18.7 billion.

The next largest department of Health and Human Services ($69.5 Billion) are less than one-tenth of the total military spending. Its primary function is to spend mandated benefits for Medicare, Medicaid, and the Affordable Care Act. Other important government functions get even fewer funds.

Each year, the deficit adds to the U.S debt. This estimated tax slows economic growth. It's like driving a car with the brakes on. It raises interest rates, as investors demand more return.T hey become hesitant to purchase Treasurys because they fear not being repaid. Now that the economy has recovered, deficit spending is not necessary. Congress should create a budget surplus to reduce the national debt burden. But it isn't being done because of politicians: who slice popular programs, usually, find themselves cut out from the next election.

Congress created the budget process. First, the Executive Office of Management and Budget prepares the budget. Federal Budget Projections, however, are troubling for long-term economic growth. Debt is projected to grow more quickly than the economy and eventually reach levels substantially higher than at any point in our nation's history As that happens, government borrowing will soak up private savings that would otherwise be invested in increasing worker productivity.

Federal spending, who gets taxed at what levels, and the borrowing the government does to make up the difference between spending and taxes, all impact the growth of the economy. Healthy growth means a stronger, more prosperous nation and expanded opportunities for you, your family and your community-more jobs, higher wages, more money to save and invest and better government services.Growth is also essential for the United States to maintain its position of global leadership.

This process creates a drag on the economy that can lead to lower wages and living standards. The Government itself is projected to spend less on investments such as infrastructure, education and basic research that can increase productivity and economic growth. Such spending is being crowded out by interest on the debt. Social Security and Health Care programs -which under current law, will all grow more quickly than the economy.

Federal Revenue won't rise enough to keep up with the increased spending, in part because of large, growing and economically inefficient tax expenditures -provisions in the tax code that subsidize certain activities over others while reducing government revenue.

To ensure a stronger economic future, policymakers must slow the growth of debt. They can give priority to spending programs that boost economic growth, they can make other programs more efficient, and they can reform the tax code to efficiently raise enough revenue. Such changes can reduce the economic drag from debt.