The federal government recorded a budget deficit of $1.8 trillion for fiscal year 2024, according to the Congressional Budget Office (CBO). The gap between government spending and revenue has widened, driven by increased expenditures on Social Security, Medicare, and soaring interest payments on the national debt.
Spending reached $6.8 trillion, about 10% higher than the previous year, while net interest payments surged to $950 billion due to rising interest rates. Social Security and Medicare costs also grew, reflecting an aging population and rising benefit payments.
Although tax revenues increased by 11% to $4.9 trillion—driven by higher individual and corporate income taxes—this wasn’t enough to close the fiscal gap. The deficit would have been even larger had the Supreme Court not struck down President Biden’s student debt cancellation plan.
As the 2024 presidential race heats up, both former President Donald Trump and Vice President Kamala Harris have proposed costly policies that could further inflate the national debt. Trump’s platform could add $7.5 trillion to the debt over the next decade, while Harris’ plan could increase it by $3.5 trillion, according to estimates from the Committee for a Responsible Federal Budget.
These fiscal challenges, compounded by the looming debt ceiling on January 2 and the need for a new spending deal before December 20, raise concerns about future fiscal sustainability.
