published : 2023-12-10
US Budget Gap Widens by $47 Billion, Reaching Record High: New Report
Federal deficit grows to $383 billion in the first two months of fiscal year 2024
The Congressional Budget Office (CBO) announced on Friday that the federal budget deficit for October and November 2023, the first two months of fiscal year 2024, has reached a staggering $383 billion.
This amount is $47 billion more than the deficit recorded during the same period last fiscal year, marking a significant increase.
While revenues this year were higher, with a 19% increase of $108 billion, outlays also rose by 17%, amounting to $155 billion more.
The timing of certain federal payments that were due on a weekend in October impacted both years' outlays, according to the CBO.
The data reveals that spending in October 2023 witnessed a substantial increase, particularly in net interest spending, which rose by $33 billion compared to the previous October.
Two areas saw significant increases in spending: The Federal Deposit Insurance Corporation and interest on public debt.
The Federal Deposit Insurance Corporation (FDIC) witnessed a $63 billion rise in outlays due to the resolution of bank failures in 2023.
However, the FDIC anticipates recovering a significant portion of that amount by liquidating the banks' assets and collecting higher premiums from FDIC-insured institutions in the coming years.
Interest on the public debt also experienced a substantial increase, rising by $60 billion or 65% compared to the same period last fiscal year, primarily due to higher interest rates.
Other categories that witnessed significant increases in spending were social security and defense.
Notably, revenues in October 2023 were $85 billion higher than the previous year, driven by deferred payments of individual and corporate taxes for taxpayers in areas affected by natural disasters.
The Treasury Department reported a deficit of $67 billion for October, $2 billion more than what CBO had estimated last month.
The widening budget gap and rising deficit reflect the challenges faced by the federal government in managing its finances and meeting its obligations.
As policymakers grapple with these fiscal complexities, the consequences of these decisions will likely have a profound impact on the economy and the lives of everyday citizens.