By David Lawder
WASHINGTON (Reuters) – The U.S. funds deficit grew to $1.833 trillion for fiscal 2024, the best exterior of the COVID-19 period, as curiosity on the federal debt topped $1 trillion for the primary time and spending grew for the Social Safety retirement program, well being care and the army, the Treasury Division mentioned on Friday.
The deficit for the yr ended Sept. 30 was up 8%, or $138 billion, from the $1.695 trillion recorded in fiscal 2023. It was the third-largest federal deficit in U.S. historical past, after the COVID-19 relief-driven deficits of $3.132 trillion in fiscal 2020 and $2.772 trillion in fiscal 2021.
The fiscal 2023 deficit had been decreased by the reversal of $330 billion of prices related to President Joe Biden’s pupil mortgage program after it was struck down by the U.S. Supreme Courtroom. It will have topped $2 trillion with out this anomaly.
The sizable fiscal 2024 funds hole of 6.4% of gross home product, up from 6.2% a yr earlier, may pose issues for Vice President Kamala Harris’ arguments forward of the Nov. 5 presidential election that she can be a greater fiscal steward than Republican opponent Donald Trump.
A fiscal think-tank, the Committee for a Accountable Federal Price range, has estimated that Trump’s plans would pile up $7.5 trillion in new debt, greater than twice the $3.5 trillion envisaged from Harris’ proposals.
U.S. receipts for the 2024 fiscal yr hit a file $4.919 trillion, up 11%, or $479 billion, from a yr earlier, as particular person non-withheld and company tax collections grew. Fiscal 2024 outlays rose 10%, or $617 billion, to $6.752 trillion.
The largest driver of the yr’s deficit was a 29% improve in curiosity prices for Treasury debt to $1.133 trillion, topping outlays for the Medicare healthcare program for seniors and protection spending.
However a senior Treasury official mentioned the weighted common rate of interest on federal debt curiosity prices started to say no in September for the primary time since January 2022.
For September, the federal government reported a $64 billion surplus, in comparison with a $171 billion deficit in September 2023, however the enchancment was largely attributable to calendar changes for profit funds. With out these, there would have been a $16 billion deficit in September 2024.
Reported receipts have been a file for September at $528 billion, up 13% from a yr earlier, whereas outlays have been $463 billion, down 27% largely because of the calendar changes.
