The US Treasury Department building in Washington, D.C. on August 15, 2023.
Nathan Howard | Bloomberg | Getty Images
The Biden administration posted a budget deficit of more than $1.8 trillion in fiscal year 2024, an increase of more than 8% from the previous year and the third-highest level on record, the Treasury Department said Friday.
Even with a modest surplus in September, the deficit totaled $1.833 trillion, $138 billion higher than last year. The only years the U.S. ran large deficits were in 2020 and 2021 when the government pumped trillions into COVID-19-related spending.
The deficit came despite record revenues of $4.9 trillion, far less than expenditures of $6.75 trillion.
Government debt has ballooned to $35.7 trillion, an increase of $2.3 trillion from the end of fiscal year 2023.
One factor worsening the debt and deficit picture has been higher interest rates from the Federal Reserve's series of anti-inflation hikes.
Total interest expenses for this year amounted to $1.16 trillion, the first time this number exceeded the $1 trillion level. After net interest earned from government investments, the total reached a record $882 billion, the third-largest budget spending, exceeding all other items except Social Security and Medicare.
The average interest rate on all government debt was 3.32% for 2024, up from 2.97% the previous year, a Treasury Department official said.
The government ran a September surplus of $64.3 billion, the product in part of calendar effects that pushed benefit payments into August, which saw a $380 billion deficit, the largest month of the year.
As a share of the total U.S. economy, the deficit exceeds 6%, which is historically unusual during an expansion and well above the historical average of 3.7% over the past 50 years, according to the Congressional Budget Office.
The Congressional Budget Office expects the deficit to continue rising, reaching $2.8 trillion by 2034. On the debt side, the office expects it to rise from the current level near 100% of GDP to 122% in 2034.
