Deficit Increases by $47 Billion Compared to Previous Year
The Congressional Budget Office (CBO) has announced that the federal budget deficit for October and November 2023, the first two months of fiscal year 2024, is estimated to be $383 billion. This amount represents an increase of $47 billion compared to the deficit recorded during the same period last fiscal year.
Higher Revenues Offset by Increased Outlays
While revenues for this year were $108 billion, or 19% higher, the CBO reports that outlays have risen by $155 billion, or 17% more. It is important to note that outlays in both years were influenced by shifts in the timing of certain federal payments, which would have been due on October 1 but fell on a weekend. This change affected the overall figures.
Key Areas of Spending Growth
According to the data, spending in October 2023 increased by $64 billion compared to the previous year. The main driver of this growth was net interest spending, which rose by $33 billion compared to the previous October. The Federal Deposit Insurance Corporation (FDIC) and interest on public debt were the two areas that experienced substantial increases in spending.
FDIC’s Role in Bank Failures
The FDIC’s outlays increased by $63 billion due to its efforts in facilitating the resolution of bank failures that occurred in 2023. The FDIC anticipates recovering a significant portion of this amount by liquidating the banks’ assets and collecting higher premiums from FDIC-insured institutions over the next few years.
Higher Interest Rates Impact Public Debt
Net outlays for interest on the public debt were substantially higher, increasing by $60 billion or 65%. This can be attributed to significantly higher interest rates compared to the first two months of fiscal year 2023.
Other Significant Spending Increases
Additional categories that experienced noteworthy growth were social security and defense.
Revenues Rise Due to Deferred Payments and Natural Disasters
Revenues in October 2023 were also $85 billion higher than collections from the previous year. This increase was driven by deferred payments of individual and corporate income taxes for taxpayers in areas that suffered natural disasters.
Treasury Department Reports a Deficit of $67 Billion for October
The Treasury Department reported a deficit of $67 billion for October, which is $2 billion more than the CBO estimated last month.
Click here to get the Fox News app.