U.S. Budget Deficit Soars to $1.8 Trillion in Fiscal 2024
The United States’ budget deficit has surged to $1.833 trillion for fiscal year 2024, marking the highest deficit outside of the COVID-19 pandemic era, according to the Treasury Department’s announcement on Friday.
This represents an 8% increase from the $1.695 trillion deficit recorded in fiscal 2023. The fiscal 2024 deficit is now the third-largest in U.S. history, following the pandemic relief-driven deficits of $3.132 trillion in 2020 and $2.772 trillion in 2021.
Interest Costs Exceed $1 Trillion
A significant driver of the swelling deficit is the rising interest costs on federal debt, which have exceeded $1 trillion for the first time. Interest expenses jumped by 29% to $1.133 trillion due to higher interest rates and increased borrowing. This amount surpasses the expenditures on both Medicare and defense spending, highlighting the growing burden of debt servicing on the federal budget.
“Interest costs as a share of GDP reached 3.93%, the highest percentage since December 1998,” a senior Treasury official reported, noting that it remains below the 1991 record of 4.69%.
Record Receipts and Rising Expenditures
Fiscal 2024 also saw record receipts, with revenues hitting $4.919 trillion, up 11% from the previous year. This increase was bolstered by growth in individual non-withheld and corporate tax collections. However, federal outlays rose by 10%, or $617 billion, totaling $6.752 trillion.
Major expenditure increases included Social Security payments, which rose 7% to $1.520 trillion; Medicare spending, up 4% to $1.050 trillion; and military programs, which saw a 6% increase to $826 billion.
Fiscal Anomalies and Monthly Surplus
The fiscal 2023 deficit was previously reduced by reversing $330 billion in costs associated with President Joe Biden’s student loan forgiveness program after it was struck down by the U.S. Supreme Court. Without this adjustment, the deficit would have surpassed $2 trillion.
In September, the government reported a $64 billion surplus compared to a $171 billion deficit in September 2023. This improvement was largely due to calendar adjustments for benefit payments. Without these adjustments, there would have been a $16 billion deficit for September 2024.
Reported receipts for September reached a record $528 billion, a 13% increase from the prior year, while outlays decreased by 27% to $463 billion, primarily due to the calendar adjustments.
Reference(s):
cgtn.com
