The federal deficit clocked in at $1.8 trillion for fiscal 2024, according to the final estimate released Tuesday by the Congressional Budget Office.
While generally in line with prior forecasts, the slightly revised deficit estimate was $81 billion, or 4 percent, smaller than the last CBO projection made in June. Revenue was slightly higher and spending slightly lower than the June forecast.
The official deficit tally will come from the Treasury Department and Office of Management and Budget later this month, but the CBO estimate usually closely mirrors the administration’s figure.
The new estimate could serve as another reminder of the nation’s fiscal woes just a few weeks before voters head to the polls on Nov. 5.
The CBO has long warned that the government is on a fiscal path that is unsustainable in the long term, with annual deficits projected to rise steadily through the coming decade to reach more than $2.8 trillion in fiscal 2034, according to the June CBO forecast.
“We cannot afford to continue to borrow at this rate indefinitely,” said Maya MacGuineas, president of the nonpartisan Committee for a Responsible Federal Budget, an independent policy group. “It is long past time that policymakers stop adding to our growing national debt and instead agree on a path forward that puts the debt on a downward, sustainable path for future generations.”
The deficit in fiscal 2024, which ended Sept. 30, was $139 billion larger than the fiscal 2023 shortfall. While revenues increased by $479 billion, or 11 percent, spending rose even more, by $617 billion or 10 percent.
Meanwhile, spending on interest payments on the public debt rose by $240 billion, to $950 billion in this last fiscal year. That total exceeds the $886 billion spent on defense, not counting emergency spending.
Revenue totaled $4.9 trillion in fiscal 2024. While that sum is $479 billion larger than the fiscal 2023 tally, a portion of that increase is due to the postponement of various fiscal 2023 tax deadlines for taxpayers in federally declared disaster zones. Those deferred tax payments pumped up the fiscal 2024 total.
Individual income and payroll taxes rose by a combined $343 billion, a 9 percent increase. Revenue from corporate income taxes rose by $109 billion, or 26 percent — again partly the result of deferred fiscal 2023 payments for those in disaster areas.
Spending totaled $6.8 trillion in fiscal 2024, a $617 billion, or 10 percent, increase. Nearly half of that increase, or $308 billion, stemmed from extra spending by the Education Department.
That change was largely the result of the Supreme Court’s June 2023 decision prohibiting the cancellation of student loan debt that the Biden administration had sought. The court ruling prompted the administration to record a $330 billion spending “cut” in August 2023 to reflect the cost savings from that case, since a year earlier it had added a similar amount on the assumption the plan would go forward.
Adjusting for the student loan plan ruling — which simply took off the books spending that never flowed to begin with — the fiscal 2024 deficit actually comes in $110 billion below what would otherwise have been a $2 trillion figure for the prior fiscal year, the CBO said.
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