WASHINGTON, Sept 12 (Askume) – The U.S. budget deficit reached $1.897 trillion in the first 11 months of fiscal 2024, the U.S. Treasury Department said on Thursday, with annual interest costs on the public debt exceeding $1 trillion for the first time.
The Treasury Department said the deficit for fiscal year 2024, which ended in August, was 24% larger than the $1.525 trillion deficit a year earlier, partly because of rising interest rates but also because of President Biden’s student loan relief plan through August 2023. Last year’s deficit was not repeated this year.
The 11-month deficit is roughly in line with an estimate from the Congressional Budget Office , which projects a $1.9 trillion shortfall in fiscal year 2024, a month before the current fiscal year ends on Sept. 30. That is expected to be the largest deficit outside the COVID-19 era, well above the $1.695 trillion deficit projected for fiscal year 2023.
Other factors that could widen the deficit in fiscal year 2024 include the higher cost of the government’s Social Security and Medicare programs for seniors and defense programs, according to Treasury data.
Revenues grew 11% in the first 11 months of fiscal year 2024, rising to $4.391 trillion from $3.972 trillion in the same period of fiscal year 2023, while total spending was $6.288 trillion, compared to $5.496 trillion in the same period of the previous fiscal year. Total spending was US$6.288 trillion, up 14% from US$5.496 trillion in the same period of the previous fiscal year.
A Treasury official told reporters that as of August, interest costs so far this fiscal year reached $1.049 trillion, up nearly 30% compared with the same period in fiscal 2023, and the weighted average interest rate that month rose to 3.35%, up 43 basis points. The higher interest payments also reflect the cost of financing the massive debt, which now exceeds $35 trillion.
The Treasury Department reported a $380 billion deficit in August, compared with an $89 billion surplus the same month last year, the result of Biden’s cancellation of student loan relief.
Revenues reached $307 billion last month, up $23 billion, or 8%, from August 2023, while spending reached $687 billion, down $493 billion, or 254%, from a year earlier, as student loan defaults fell %.
