The annual deficit in the United States is on track to reach nearly $2 trillion for the current fiscal year. This figure is almost double the record deficits that were seen prior to the COVID-19 pandemic. To make matters worse, federal borrowing has reached a staggering rate of over $5 billion per day.
The worrisome deficit news arrives as the national debt continues to surge, inching closer to $36 trillion. Maya MacGuineas, president of the Committee for a Responsible Federal Budget, warned that in the coming years, three significant trust funds, namely highways, Medicare, and Social Security, will exhaust their reserves.
This impending situation will force us to confront more challenging choices regarding how to sustain crucial government priorities.
According to the Congressional Budget Office (CBO), it is noteworthy that the national debt has risen despite a significant increase in federal revenue. The CBO reports that federal revenue has grown by 11%, equivalent to $479 billion.
According to the report published by the CBO, the revenues in all major categories, particularly individual income taxes, exceeded the figures recorded in fiscal year 2023.
Recent studies on the tax plans of the presidential candidates reveal that both plans would contribute to the national debt. Multiple polls conducted in recent years have highlighted inflation as a major concern among Americans, which can be attributed to the increase in debt spending.
According to MacGuineas, the situation has the potential to worsen next year.”In 2025, lawmakers will encounter a multitude of challenges,” she expressed.
“These challenges will not only include the escalating deficits, debt, and interest rates but also the reestablishment of the debt ceiling, the expiration of the budget caps under the Fiscal Responsibility Act, and significant lapses in taxation and government spending.”
