According to a recent report by The Center Square, the federal deficit has reached a staggering $1.7 trillion in just one year. The national public debt has also hit a record high of $34.7 trillion, marking a historic moment in U.S. history. This information was released by the nonpartisan Congressional Budget Office, shedding light on the severity of the current economic situation.
The national public debt has increased by a staggering $37 billion in a single day, with the overall debt now surpassing $34.7 trillion as of Tuesday.
According to the Treasury, the national debt is distinct from the deficit. A deficit is incurred when the federal government spends more than it takes in as revenue. As these deficits pile up, the national debt increases.
According to the Treasury, the deficit for the fiscal year 2023 was $1.7 trillion, a $320 billion increase from the previous year. The federal government has been running a deficit every year since 2001, with spending on Social Security, healthcare, and interest on federal debt growing faster than federal revenue since 2016. In that fiscal year, federal spending amounted to $6.13 trillion, while total revenue was $4.44 trillion.
According to the Congressional Budget Office’s (CBO) May 2024 monthly budget review, the federal budget deficit for the first eight months of fiscal year 2024 was estimated to be $1.2 trillion. This is $38 billion higher than the deficit recorded during the same period in the previous fiscal year. The federal government had to borrow $1.2 trillion to pay for expenses that it didn’t have enough funds to cover.
In May, the recorded deficit amounted to $348 billion, which is $108 billion more than the deficit recorded in May 2023, as noted.
Over the course of the last year, spanning from June 2023 to May 2024, the federal budget deficit amounted to a staggering $1.7 trillion, which includes the May deficit of $348 billion.
The Congressional Budget Office (CBO) releases a monthly report containing an analysis of federal spending and revenues for the previous month and fiscal year to date. For the period of October 2023 through May 2024, revenues saw an increase of $294 billion (or 10%), while outlays rose by $332 billion (or 8%) compared to the same period in fiscal 2023. It’s worth noting that the fiscal year runs from October 1 through September 30.
In 2020, there was an increase in Social Security benefit spending of $74 billion, which is equivalent to 8%. This increase was due to the rise in the average benefit payment, primarily attributed to cost-of-living adjustments. On the other hand, Medicare outlays increased by $51 billion, or 10%, mainly because benefit payments to Medicare Advantage plans increased. However, Medicaid outlays decreased by $8 billion or 2%.
According to a report, spending by the Department of Defense saw a significant rise of 8% totaling $39 billion in the previous fiscal year compared to the same period. This increase in spending amounts to $8 billion, which is an impressive 12%. The Department of Veterans Affairs also saw a substantial increase in their spending, rising by 14% or $27 billion as reported.
According to the Committee for a Responsible Government’s assessment of the data, our fiscal situation is deteriorating due to increasing spending and decreasing revenue. The report projects that the debt will rise from 97% of GDP at the end of fiscal 2023 to a record-breaking 106.4% of GDP by 2028, with projections showing a steady increase to 166% of GDP by the end of 2054.
According to E. J. Antoni, Ph.D., an economist at the Heritage Foundation, the actual daily deficit is being concealed by the amount of cash being withdrawn by Treasury Department Secretary Janet Yellen from the U.S. Treasury. The report, citing Bureau of the Fiscal Service data, supports this analysis. The Center Square covered this development.
Maya MacGuineas, who is the president of the Committee for a Responsible Federal Budget, has expressed her concern over the current fiscal situation of the United States. According to her, the country has already borrowed $1.2 trillion, which is an average of $4.9 billion per day, with only four months left in the fiscal year. She emphasized that it is imperative to address this issue promptly before it spirals out of control.
According to The Center Square, critics have pointed out that this year, Congress has allocated more funds towards paying off interest on the national debt than it has towards the national defense budget and Medicare combined.
According to projections by the CBO, the expenditure on the national debt’s interest is expected to surge in the coming years. It is estimated that the interest cost will surpass the U.S. GDP by more than two times in the next 30 years.
The committee is urging Congress to take action and implement solutions to address the country’s fiscal deterioration. In their statement, they emphasized the need for both immediate and long-term solutions to reduce the debt-to-GDP ratio and improve the overall economic outlook. They called on policymakers to work together towards achieving this goal.