There have been reports that the White House is anticipating that the federal budget deficit would increase to at least $1 trillion this year and they made it official yesterday evening.
The White House Office of Management and Budget (OMB) released their mid-year review which anticipates a trillion dollar deficit for the current fiscal year ending on September 30th.
But hey -- it could have been worse.
The White House projects that the federal deficit will surpass $1 trillion this year, the only time in the nation's history the deficit has exceeded that level, excluding the four-year period following the Great Recession.
"The 2019 deficit has been revised to a projected $1.0 trillion," the White House Office of Management and Budget (OMB) wrote in its midyear review. [...]
The OMB projection is actually $91 billion lower than its previous estimate, largely because of technical provisions and somewhat lower than expected mandatory and interest spending.
While the White House's new estimate is lower than their previous, we should also keep in mind that the federal government has collected over $50 billion in tariffs during the current fiscal year.
So, if not for Trump's trade war and the slightly lower than expected spending on interest, the deficit would already be closer to $1.15 trillion.
I am not a deficit hawk, but I do think it's a little concerning that we're seeing numbers like this at a time when the economy is still technically expanding and unemployment is historically low. It's concerning for the same reason that the Federal Reserve cutting interest rates at a time like this is concerning. There won't be much room to maneuver if an actual economic downturn arrives.
We're seeing recession-like deficits at a time when there is no recession. At least not yet. On the other side of this are inevitable tax hikes.