The U.S. budget deficit reached $1.897 trillion for the first 11 months of the 2024 fiscal year, the Treasury Department said on Thursday, as annual interest costs on the public debt topped $1 trillion for the first time.
The Treasury said the fiscal 2024 deficit through August was up 24% from a $1.525 trillion deficit in the comparable year-ago period, partly due to higher interest rates but also because of a $319 billion reversal of costs in August 2023 for President Joe Biden's student loan forgiveness program, which was struck down by the U.S. Supreme Court. Last year's reduction was not repeated this year.
The 11-month deficit roughly matches the Congressional Budget Office's estimate of a $1.9 trillion gap for all of fiscal 2024 with one month to go before the Sept. 30 end of the fiscal year. That puts it on pace to be the largest deficit outside the COVID-19 era and sharply higher than the $1.695 trillion deficit reported for fiscal 2023.
Other factors boosting the deficit for fiscal 2024 included higher costs for the government-run Social Security and Medicare programs for seniors as well as defense programs, according to the Treasury data.
Receipts for the first 11 months of fiscal 2024 rose 11% to $4.391 trillion from $3.972 trillion in the same period of fiscal 2023, while outlays totaled $6.288 trillion, a 14% increase over the $5.496 trillion spent in the comparable period in the previous fiscal year, also partly reflecting the 2023 student loan reversal.
Treasury's fiscal year-to-date interest costs hit $1.049 trillion through August, up about 30% from the comparable period in fiscal 2023, as its weighted average interest during the month reached 3.35%, up 43 basis points from a year earlier, a Treasury official told reporters in a call. The higher interest outlays also reflect financing costs for a larger amount of debt, now above $35 trillion.
For the month of August, Treasury reported a $380 billion deficit compared to a surplus of $89 billion in the same month last year that resulted from the reversal of Biden's student loan forgiveness program.
Receipts last month reached $307 billion, an increase of $23 billion, or 8%, from August 2023, while outlays reached $687 billion, up $493 billion, or 254%, from the student loan-reduced year-ago period.
