The U.S. government on Friday posted a $1.695 trillion budget deficit in fiscal year 2023, a 23% increase from a year earlier, as revenues fell and outlays for Social Security, Medicare and costs Record interest rates on the federal debt increased.
The Treasury Department said the deficit was the largest since a $2.78 trillion COVID-driven gap in 2021. It marks a major return to rising deficits after consecutive declines during President Biden’s first two years in office. .
The shortfall comes as Biden is asking Congress for $100 billion in new foreign aid and security spending, including $60 billion for Ukraine and $14 billion for Israel, along with funding for U.S. border security. United States and the Indo-Pacific region.
The large deficit, which surpassed all pre-COVID deficits, including those caused by Republican tax cuts passed during Donald Trump’s administration and the financial crisis years, is likely to inflame Biden’s fiscal battles with Republicans. in the House of Representatives, whose demands for spending cuts brought the United States to the brink of default in early June on the debt ceiling.
The shortfall comes as President Biden is asking Congress for $100 billion in new foreign aid and security spending, including $60 billion for Ukraine and $14 billion for Israel.Al Drago/Pool via CNP/ SplashNews.com
A deal to avoid a government shutdown over demands for deeper spending cuts by hardline Republicans led to the ouster of House Speaker Kevin McCarthy, and the party is still divided over who should lead them. , which is expected to enter into negotiations before a new fiscal deadline in mid-November is more difficult.
By September, the last month of the fiscal year, the deficit fell to $171 billion from $430 billion in September 2022.
“Declining revenues contribute significantly to the 2023 deficit, underscoring the importance of policies enacted and proposed by President Biden to reform the tax system,” Treasury Secretary Janet Yellen and the Treasury Secretary said in a joint statement. Director of the Office of Management and Budget, Shalanda Young.
The 2023 fiscal deficit would have been $321 billion larger, but was reduced by this amount because the Supreme Court struck down Biden’s student loan forgiveness program as unconstitutional. The ruling forced the Treasury to reverse a preemptive charge against fiscal 2022 budget results that increased that year’s deficit.
“Declining revenues contribute significantly to the 2023 deficit, underscoring the importance of policies enacted and proposed by President Biden to reform the tax system,” said Treasury Secretary Janet Yellen.REUTERS
The fiscal year 2022 deficit was $1.375 trillion.
Taking into account the two one-time adjustments, last fiscal year’s deficit would have been closer to $1 trillion and this year’s deficit would have been closer to $2 trillion, a Treasury official said.
Record interest costs
The 2023 deficit marks an abrupt end to two years of declining deficits for Biden as COVID-19 spending faded. The U.S. deficit peaked in fiscal 2020 at $3.13 trillion, when the steepest recession since the 1930s severely constrained tax revenues while spending on unemployment benefits, direct payments to consumers and business aid reached its peak.
But the Congressional Budget Office has warned that under current tax and spending legislation, U.S. deficits will approach COVID-era levels by the end of the decade, reaching about $2.13 trillion in 2030. as interest, health and pension costs rise.
The budget deficit increased 23% to $1.695 trillion from a year earlier. fake images
For fiscal 2023, total revenue fell $457 billion, or 9% from fiscal 2022, to $4.439 trillion, largely due to a drop in non-withheld income tax payments of individuals amid worse performance of stocks and other financial assets as interest rates rose. .
Other revenue declines included a $106 billion drop in Federal Reserve profits as interest paid on bank reserves consumed any portfolio income.
Fiscal 2023 outlays fell $137 billion, or 2%, from a year earlier to $6.134 trillion. The outlays would have been more modest if not for large increases in spending on retirement and health benefits for seniors and in debt service costs.
Biden talks about his administration’s plans to protect Social Security and Medicare and reduce health care costs in February.AP
Social Security spending rose 10% to $1.416 trillion due to cost-of-living adjustments for inflation, and spending on the Medicare senior health care program rose 4% to $1.022 trillion.
Interest costs on the more than $33 trillion of federal debt also rose sharply, up 23% to $879 billion, a record. Net interest payments, excluding intragovernmental transfers to trust funds, rose 39% to $659 billion, also a record, according to a Treasury official.
Gross interest payments amounted to 3.28% as a proportion of gross domestic product, the highest since 2001, and the net share of 2.45% was the highest since 1998, the official said.
Interest rates have skyrocketed over the past year and a half as the Federal Reserve raised borrowing costs to curb inflation. The average interest cost on outstanding Treasury debt was 2.97% last fiscal year, up from 2.07% the year before.
Categories: Trending
Source: vtt.edu.vn