According to a report by The Center Square, the national public debt has reached a historic high of $34.7 trillion, with the federal deficit growing to $1.7 trillion in just one year. The recent findings by the nonpartisan Congressional Budget Office have shed light on the severity of the situation.
The national public debt escalated by a staggering $37 billion on Monday, and the overall debt surpassed a whopping $34.7 trillion by Tuesday.
According to the Treasury, the deficit is distinct from the national debt. When the federal government’s spending exceeds its revenues, it results in a deficit. Over time, as deficits accumulate, the national debt increases.
According to the Treasury, the deficit for the previous fiscal year was $1.7 trillion, a rise of $320 billion from the previous year. The total federal government spending for fiscal 2023 was $6.13 trillion, while total revenue was $4.44 trillion. The Treasury also notes that since 2001, the federal government has had a budget deficit every year. Furthermore, the growth of federal revenue has been outpaced by the increases in spending on Social Security, health care, and interest on federal debt since 2016.
According to the Congressional Budget Office’s (CBO) monthly budget review for May 2024, the federal budget deficit for the first eight months of fiscal 2024 was estimated to be $1.2 trillion, which is $38 billion higher than the previous fiscal year’s corresponding period. To cover the expenses it didn’t have funds for, the federal government had to borrow $1.2 trillion.
According to the report, there was a deficit of $348 billion in May, which is $108 billion higher than the deficit recorded in May 2023.
From June 2023 to May 2024, the federal budget deficit amounted to $1.7 trillion, inclusive of the May deficit of $348 billion.
The Congressional Budget Office (CBO) provides a monthly report analyzing the federal spending and revenues for the previous month and the fiscal year to date. According to the report, revenues for the period of October 2023 through May 2024 were $294 billion higher, representing a 10% increase from the same period in fiscal 2023. Additionally, outlays were $332 billion higher, indicating an 8% increase from the same period of the previous year. It is important to note that the fiscal year runs from October 1 through September 30.
In the past year, Social Security benefit spending has risen by $74 billion, which is an 8% increase. This rise can mainly be attributed to the increase in average benefit payment, which happened due to cost-of-living adjustments. Meanwhile, Medicare outlays have seen a net increase of $51 billion, or 10%. This rise can be attributed to the increase in benefit payments to Medicare Advantage plans. However, Medicaid outlays have decreased by $8 billion, or 2%.
According to a recent report, there has been a significant increase in spending by the Department of Defense and Department of Veterans Affairs. The Department of Defense spent a total of $39 billion, which is an 8% increase from the previous fiscal year. Additionally, the department’s spending has increased by $8 billion, which is a 12% increase. Meanwhile, the Department of Veterans Affairs has increased its spending by $27 billion, or 14%.
According to the Committee for a Responsible Government, the current fiscal situation is deteriorating due to increasing spending and decreasing revenue. The analysis reveals that debt is expected to rise from 97% of GDP by the conclusion of fiscal 2023 to a record high of 106.4% of GDP by 2028. The debt is projected to continue to rise and could potentially reach 166% of GDP by the end of 2054.
According to an analysis by economist E.J. Antoni of the Heritage Foundation, the Bureau of the Fiscal Service data suggests that the increasing federal debt is concealing the actual daily deficit. The Center Square reported that Treasury Department Secretary Janet Yellen is draining a substantial amount of cash from the U.S. Treasury, which is further masking the true deficit.
Maya MacGuineas, the president of the Committee for a Responsible Federal Budget, has expressed concern over the United States’ borrowing spree. In just four months, the country has borrowed a staggering $1.2 trillion, which amounts to an average of $4.9 billion a day. MacGuineas believes that urgent steps need to be taken to address the country’s fiscal situation before it spirals further out of control.
According to a report by The Center Square, critics have pointed out that this year, the interest on the national debt has surpassed the spending on both the national defense budget and Medicare by Congress.
According to the CBO’s projections, the expenditure on interest for the national debt is set to rise significantly. In the next three decades, interest is estimated to cost more than double the United States’ Gross Domestic Product.
In order to address the current state of fiscal deterioration, the committee is urging Congress to take action. They emphasize that both immediate and long-term solutions are necessary to reduce the debt-to-GDP ratio and improve the country’s economic outlook. The committee believes that lawmakers should work together to implement these solutions and take a proactive approach to resolving this issue.