The U.S. Treasury Department building in Washington, DC, on August 15, 2023.
Nathan Howard | Bloomberg | Getty Images
The Biden administration posted a budget deficit of more than $1.8 trillion in fiscal 2024, up more than 8% from a year ago and the third-highest on record, the Treasury Department said Friday.
Even with a modest surplus in September, the deficit totaled $1.833 trillion, up $138 billion from a year ago. The only years the U.S. ran a large deficit were 2020 and 2021, when the government poured trillions into spending related to the Covid-19 pandemic.
The deficit arose despite record revenues of $4.9 trillion, well below spending of $6.75 trillion.
The national debt has risen to $35.7 trillion, an increase of $2.3 trillion since the end of fiscal year 2023.
Complicating the debt and deficit picture was high interest rates due to the Federal Reserve's series of rate hikes to combat inflation.
Interest expense for the year totaled $1.16 trillion, surpassing the trillion-dollar mark for the first time. Excluding interest earned on the government's investments, the total was a record $882 billion, the third-largest expenditure in the budget and surpassing all other items except Social Security and health care.
The average interest rate on all government debt was 3.32% in 2024, up from 2.97% a year earlier, a Treasury official said.
The government actually posted a $64.3 billion surplus in September, due in part to calendar effects that pushed benefit payments into August, which saw a $380 billion deficit, the largest month of the year.
According to the Congressional Budget Office, the deficit as a percentage of the entire U.S. economy is above 6%, unusual in the history of an expansion and well above the historical average over the past 50 years of 3.7%.
The CBO expects deficits to continue rising and reach $2.8 trillion by 2034. On the debt side, the bureau expects it to rise from nearly 100% of GDP currently to 122% in 2034.
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