Steve Mnuchin Defends Record U.S. Deficit, Spending: COVID-19 'Like a War'

Treasury Secretary Steve Mnuchin on Sunday defended the record U.S. deficit and spending under the Trump administration, saying the COVID-19 pandemic requires as much funding as a "war."

Mnuchin said any efforts to deal with the country's record $3.3 trillion deficit for 2020 have been put on hold, as he responded to a Wednesday projection from the Congressional Budget Office. The treasury secretary said the coronavirus pandemic has required a war-like spending effort, adding to a shortfall that is more than triple the debt from 2019, and $2.2 trillion more than the figure predicted back in March.

Despite the U.S. deficit now accounting for about 16 percent of the country's gross domestic product, Mnuchin said reductions in spending are simply not possible amid the ongoing health crisis.

"Before we got into COVID I thought the debt was very manageable," Mnuchin told Fox News Sunday. "This is like a war. In a war, you've got to spend whatever you need to spend."

Despite Mnuchin's claim Sunday morning, economists were quick to point out that the U.S. deficit under the Trump administration was way up before COVID-19. No financial projections from 2019, when the deficit hit $984 billion, suggested there was enough growth even possible to "pay down the debt" without massive spending cuts. And such budgetary cutbacks appear unlikely, as Mnuchin complained that House Speaker Nancy Pelosi is refusing to negotiate a new coronavirus stimulus package—unless Republicans are willing to spend at least $2.5 trillion in another CARES Act-level piece of legislation.

The deficit grew $205 billion—or 26 percent—between 2018 and 2019, and is set to get much larger this year. As The Washington Post highlighted in October 2019, the deficit is up nearly 50 percent since Donald Trump was elected president.

Mnuchin told Fox News that once the pandemic has come to an end in the U.S., then the federal government can get back to focusing on how to manage the ballooning debt. "Once the economy is back, we will focus on this issue," he added.

In addition to the national deficit, the U.S. trade deficit has also ballooned to record highs, with the balance falling to a deficit of $63.6 billion in July. That is $10 billion larger than the month before and the biggest monthly deficit since July 2008. It was the highest dollar amount of debt recorded since 2012.

The U.S. budget deficit has more than doubled since 2015, with spending for the 2019 fiscal year ending last September reaching $4.4 trillion versus only $3.5 trillion being brought in through taxes and other revenue.

Mnuchin and other Trump administration officials have repeatedly pointed blame at Congress for not doing enough to reduce expenditures. But members of Congress say the Trump-backed spending increases for the military and the border wall blew out a budget that was already strained by the 2017 tax cut law.

Newsweek reached out to the White House for additional remarks Sunday afternoon.

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Treasury Secretary Steve Mnuchin on Sunday defended the record U.S. deficit and spending under the Trump administration, saying the COVID-19 pandemic requires as much funding as a "war." BRENDAN SMIALOWSKI / Contributor/Getty Images
Steve Mnuchin Defends Record U.S. Deficit, Spending: COVID-19 'Like a War' | News