According to the Congressional Budget Office, the American public can expect the federal deficit to surpass $1 trillion by 2020 - comparable to the total around the time of the US' 2007 to 2008 financial crisis.
"Going forward the President's economic policies that have stimulated strong economic growth, combined with proposals to cut wasteful spending, will lead America toward a sustainable financial path", Mnuchin said.
Reuters reports that, as the government closes out fiscal year 2017, a spending spree has driven it further into the red, though the deficit may not last for long.
"America's booming economy will create increased government revenues - an important step toward long-term fiscal sustainability", Trump's budget director, Mick Mulvaney, said in a statement accompanying the Treasury report.
The Trump administration has been trying to remedy the situation with tax cuts, but critics argue that approach will only make the problem worse.
"Going forward, President Trump and this administration will continue to work with Congress to make the hard choices needed to bring fiscal restraint, which, when matched with increasing revenue, will reduce our deficit", he said.
Ahead of next month's hard-fought mid-term elections, in which control of the House of Representatives hangs in the balance, Republicans have largely avoided campaigning on the tax cuts.
Republican tax cuts, increased federal spending and an aging population have contributed to the fiscal strains, though the GOP says tax reform enacted this year will spur economic growth and lift government revenue.
The government's fiscal year runs from October 1 to September 30.
In all, government spending rose by $127 billion past year, while tax collections increased by $14 billion. Corporate income-tax receipts fell 31 percent in fiscal 2018 while individual income taxes gained 6.1 percent, according to Treasury data.
Interest expenses on government debt increased 14 per cent or $65 billion due to the higher debt level as well as rising interest rates, a Treasury official told reporters.
Military spending rose United States dollars 32 billion while education spending dropped USD 48 billion, a 43 per cent reduction.