The finances deficit rose in December and is now 40% increased than a yr in the past

A view from the US Treasury Department building in Washington DC, USA, on December 30, 2024. The US Treasury Department was cyberattacked by a Chinese state-sponsored actor in early December.

Celel Gunes | Anadolu | Getty Images

The federal budget fell further into the red in December, leaving the deficit in the first fiscal quarter almost 40% higher than the previous year.

According to a Treasury Department report on Tuesday, the deficit in the final calendar month of 2024 totaled $86.7 billion, actually down 33% compared to the same period last year. However, this brought the total value for the three-month fiscal year to $710.9 billion, about $200 billion more than the same period last year, or 39.4%.

Rising financing costs, continued spending growth and falling tax revenues have combined to spiral deficits and push the national debt past $36 trillion.

Although short-term Treasury yields have remained relatively stable over the past month, rates at the other end of the duration curve have risen sharply. The yield on the 10-year benchmark bond was most recently just under 4.8%, around 0.4 percentage points above the level a month ago.

At the same time, spending in the first quarter was 11% higher than a year ago, while revenue fell 2%.

Interest on the national debt totaled $308.4 billion in fiscal year 2025, up 7% from the previous year. Financing costs are expected to exceed $1.2 trillion for the full year, surpassing the 2024 record.

The government has spent more on interest payments this year than on any other category except social security, defense and health care.

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