The U.S. federal government reported a significant increase in the budget deficit for December, reaching $129 billion. This represents a 52% rise compared to the previous year, as outlays surged while receipts fell. The U.S. Treasury Department attributed the rise in outlays to higher Social Security payments and increased interest on the public debt. Meanwhile, receipts for the month declined by 6% to $429 billion.
Throughout the first three months of the 2024 fiscal year, which commenced on October 1, the federal deficit reached $510 billion. This figure marks a substantial increase of $89 billion or 21% from the same period in the previous year.
A Treasury official commented on the data, stating that both outlays and receipts for the year-to-date were at record levels. Outlays rose by 12% to $1.618 trillion, while receipts increased by 8% to $1.108 trillion.
It is notable that December’s public debt interest costs rose to $119 billion, an 11% uptick compared to December 2022. This increase can be attributed to higher debt levels and a weighted average interest rate of 3.11%, which was three quarters of a point higher than the previous year.
These statistics reflect the current economic situation, showcasing the impact of increased government spending and reduced revenue collection. The rise in outlays highlights the growing expenditure on Social Security benefits and the need to service the public debt. The decline in receipts suggests a decrease in tax revenue due to pandemic-related tax payment deferrals.
As the U.S. government faces a growing budget deficit, efforts to manage and address the economic implications will be crucial. Experts and policymakers will closely monitor these figures, evaluating potential measures to reduce the deficit and ensure stability in the nation’s finances.
