From October 2022 to June 2023, the US fiscal deficit saw an almost threefold increase, announced the Treasury Department on Thursday. The rise has been attributed to amplified expenditures and decreased revenues.
This nine-month period witnessed the deficit rise to $1.39 trillion, a significant increase from the $515 billion recorded in the same timeframe the preceding year.
Year-on-year comparisons revealed a drop of 11% in revenues while government spending increased by 10%.
The Treasury attributed part of the reduced revenue to comparatively higher capital gains and other revenue categories last year and their subsequent decline this year, as per an anonymous Treasury official.
In terms of expenditures, one contributor was the uptick in interest expenses. Earnings from the Federal Reserve dipped by $93 billion. Conversely, interest owed on public debt swelled by $131 billion, reaching $652 billion for the year thus far. This rise has been primarily due to increasing interest rates, as stated by the Treasury Department.
There was also a noticeable increase in outlays by the Social Security Administration. Rising by $101 billion, this was instigated by increased beneficiaries and cost-of-living adjustments.
A Treasury official also highlighted the notable outlays by the Federal Deposit Insurance Corporation. Predominantly for the resolution of three banks - First Republic, Silicon Valley, and Signature, these fiscal outlays accounted for around $52 billion within this fiscal year to date.
