Deficit Nears $2 Trillion Amid Rising Interest and Little Action
The Congressional Budget Office (CBO) today released its estimate of the Fiscal Year (FY) 2024 budget deficit in its Monthly Budget Review, projecting that the deficit totaled $1.8 trillion in FY 2024 with a monthly surplus of $63 billion due to timing shifts. This marks the second year in a row that deficits have totaled nearly $2 trillion after removing the effects of the reversed student loan cancellation.
The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:
With one fiscal year ending and another starting anew, it’s clear that we have a lot of course correcting to do. We’re now borrowing $5 billion per day, while interest payments are soaring.
At nearly $2 trillion, last year’s deficit was almost double pre-pandemic levels. We face massive headwinds with debt set to reach an all-time record as a share of the economy by 2027; and we don’t even have a plan to address our fiscal challenges.
In 2025, lawmakers will face new hurdles. Not only rising deficits, debt and interest, but also the reinstatement of the debt ceiling, the end of the Fiscal Responsibility Act’s budget caps, and major tax and spending expirations. Within the next dozen years, three major trust funds – for highways, Medicare, and Social Security – will run out of a reserves, forcing us to reckon with even tougher decisions on how to keep important government priorities afloat.
These hurdles will present a test for policymakers, requiring them to either offset their desired outcomes with real budgetary savings or pass the bill on to the next generation.
We cannot afford to continue to borrow at this rate indefinitely. It is long past time that policymakers stop adding to our growing national debt and instead agree on a path forward that puts the debt on a downward, sustainable path for future generations.
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For more information, please contact Matt Klucher, Assistant Director for Media Relations, at klucher@crfb.org.
