“I’m the king of debt,” then-candidate Donald Trump told CNN’s Chris Cuomo in May 2016. “I understand debt better than probably anybody. I know how to deal with debt very well. I love debt.”
“But,” he added, “debt is tricky, and it’s dangerous, and you have to be careful, and you have to know what you’re doing.”
Both parts of that were true. As a businessman, Trump was indeed enamored of debt, which allowed him to expand his real estate holdings. And, at times, it burned him, as when he was forced to bankrupt casinos he owned in Atlantic City.
Little did we know at the time, though, how much Trump would love building the national debt, as well, particularly given how vociferous he was about the growth of the debt under President Barack Obama.
On Friday, the Treasury Department announced that the monthly deficit had reached an all-time high in February: For the month, the government spent $234 billion more than it took in. That’s a 46 percent larger deficit than the government saw in the entirety of 2007. And as the government runs a deficit, the overall debt grows.
The February figure comes after two relatively decent months with only modest deficits. But it means that the average monthly deficit under Trump — $117 billion — is now higher than both the average monthly deficits in Obama’s second term and in his first term, when the government was focusing heavily on battling the recession.
Part of this is a function of increased spending and tax receipts over the past decade. But part of it, too, is the 2017 Republican tax-cut bill, which has resulted in a drop in how much revenue the government has collected from corporations. While individual income taxes were up in fiscal 2018 relative to 2017, corporate tax receipts were down. So far this year, they’re down further still.
The year-over-year change is stark. Corporate tax receipts fell $92 billion in fiscal 2018 relative to fiscal 2017 and are down $15 billion more so far in fiscal 2019 relative to the lower 2018 numbers.
Remember: The promise of the 2017 tax bill was that the drop in revenue from cutting corporate taxes would be made up for by the expanding economy. That cut would fuel higher incomes and higher income taxes. Income taxes were up in 2018 relative to 2017, but only by 6 percent. (Corporate taxes fell by 31 percent.)
Last month, we noted that Trump has been adding to the federal debt at a faster clip than Obama did toward the end of his second term. It shouldn’t come as a surprise, really. It’s what Trump promised Cuomo nearly three years ago.