US budget deficit widens to $1.7tr in FY23

October 14, 2023 (MLN): The United States federal government’s budget deficit has widened to $1.7 trillion for the fiscal year 2023, according to the latest press release issued by the Congressional Budget Office (CBO).

The budget deficit in the month of September alone stood at $166 billion.

It is important to mention that in 2022, the Biden Administration announced for student loan forgiveness.

However, in June 2022, the Supreme Court invalidated the plan.

After adjusting for the enactment and reversal of the President’s student debt cancellation plan and timing shifts, the deficit more than doubled between FY2022 and 2023, from $0.9tr to $2tr.

At the same time, interest rates on U.S. Treasury securities have been surging, with the rate on the ten-year Treasury note closing above 4.7% last week, levels not seen since 2007.

It is important to mention that this is the third highest budget deficit in the US history.

Moreover, the US government is currently spending 44% of the GDP per year, higher to the proportion during World War II.

On a yearly basis, the budget deficit has increased by $300bn compared to the fiscal year 2022.

To note, the budget deficit for 2022 plunged to $1.38tr, a second straight drop amid reduction in Covid-related aid spending, coupled with surge in revenues.

The national debt is currently at a record $33.5tr, as per the latest U.S. Treasury data.

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