2019 deficit nears $1 trillion, highest since 2012: Treasury

2019 deficit nears $1 trillion, highest since 2012: Treasury
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The federal deficit for fiscal 2019 reached close to $1 trillion for the first time since 2012, according to final Treasury Department figures released Friday.

In the final accounting, the deficit came in at $984 billion, more than $200 billion, or 26 percent, higher than last year and the same figure the Congressional Budget Office projected earlier in the month.

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The deficit, which is projected to grow in 2020, has only surpassed $1 trillion four times in the nation's history, during the four-year stretch following the 2008 global financial crisis.

While President TrumpDonald John TrumpGOP senators balk at lengthy impeachment trial Warren goes local in race to build 2020 movement 2020 Democrats make play for veterans' votes MORE as a candidate had promised to wipe out the nation's debt altogether, it now stands above $22 trillion. The annual deficit, which adds to the nation's overall debt burden, was $587 billion in the last full fiscal year before Trump took office.

“America remains on the fast track to trillion-dollar deficits, rising rapidly as far as the eye can see," said Michael Peterson, CEO of the Peterson Foundation, which advocates for debt reduction.

"With all of the important investments we need to make in our future, we find ourselves in a situation where interest costs are the fastest growing program in the federal budget. That’s not where we want growth," he said.

Net interest, the amount the government pays to service the debt, reached $376 billion, larger than the combined cost of veterans benefits and services and education, and more than half as much as the cost of defense.

The main drivers of the deficit are mandatory programs such as Social Security, Medicare, and Medicaid, but recent legislation has contributed to it as well.

The GOP tax law added substantially to the deficit by scaling back revenues, while two bipartisan spending deals added financial resources for both defense and domestic priorities.

CBO has warned that the nation is on an "unsustainable" fiscal path. Treasury projected that the 2020 deficit would amount to $1.045 trillion. 

The rise in the deficit during a booming economy is particularly worrying to economists and budget watchers.

A deficit of this size following the longest span of economic growth in history shows just how reckless our leaders have become," said former Obama Defense Secretary Leon Panetta, a co-chairman for the Committee for a Responsible Federal Budget.

"This is exactly the time when deficits should be contracting, not expanding," he added.

Updated at 2:48 p.m.