Money

US Budget Gap Soars to $1.7T

OCT 21 2023·Updated FEB 7 2024

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The Facts

On Friday, the US Treasury Department announced the federal government posted a $1.695T budget deficit in fiscal year 2023. The fiscal year 2022 deficit was $1.375T.
Reuters
The budget shortfall is equal to 6.3% of gross domestic product (GDP) — the third-largest on record. Last year, the budget gap stood at 5.4% of GDP.
Bloomberg.com
In September, the last month of the fiscal year, the deficit — the largest since the pandemic stoked a $2.78T gap in 2021 — fell to $171B compared to $430B in September 2022.
New York Post
The US government posted a 23% jump from the prior year as revenues fell $457B, expenses reduced by $137B, and outlays totaled $6.134T.
CNBC
The deficit adds to the US national debt — which topped $33T this year — with net interest on the debt increasing to a record $659B in 2023 from $475B last year.
nytimes
The budget report comes as Pres. Joe Biden seeks $100B from Congress in new foreign aid for Ukraine and Israel and security spending for the US border and the Indo-Pacific region.
The Washington Times

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The Spin

Republican narrative

Deficit-trimming measures, including deep budget cuts and curbing spending on social safety net programs, are crucial to reducing the federal deficit and preventing a government shutdown next month. The current borrowing path is unsustainable, especially if interest rates stay high for an extended period.

The Washington Examiner

Democratic narrative

There's no need to panic. Leaving aside the student loan effects, the surge in budget deficit isn't because of a rise in spending but due to a steep fall in revenues. It's not a spending problem but a revenue problem — thanks to Republican tax cuts and decades of trickle-down economics.