Outlays increased 22 percent while revenues rose by just 5 percent.
The U.S. government budget deficit totaled $347 billion in May, up from a $240 billion deficit in the same month a year earlier, according to the latest Monthly Treasury Statement data. This surpassed the consensus estimate of $250 billion.
Eight months into the 2024 fiscal year, the fiscal year-to-date federal shortfall totals $1.202 trillion, compared with a deficit of $1.695 trillion in the entire fiscal year of 2023.
In May, outlays rose 22 percent to $670 billion, while revenue climbed 5 percent to $323 billion.
Medicare, at $142 billion, and Social Security, at $123 billion, were the top outlays in the month. On a fiscal year-to-date basis, Social Security costs reached $960 billion and Medicare outlays have been $607 billion.
Net interest was the third-largest budget item last month, exceeding defense spending. It totaled $87 billion in May and $601 billion in the first eight months of the current fiscal year, higher than spending on health care, defense, income security, and veterans’ benefits.
The Treasury forecasts that interest on Treasury debt securities will surpass $1.14 trillion by the end of fiscal year 2025.
Debt-servicing costs are now equal to nearly 80 percent of all personal income taxes, which totaled approximately $143 billion in May.
The 12-month rolling deficit (June 2023 to May 2024) totals $1.6 trillion, up $108 billion from the previous 12-month span. This represents a little more than 6 percent of the gross domestic product.
According to the Committee for a Responsible Federal Budget, the rolling deficit would be $2.1 trillion if the effects of student loan cancellation are removed from the numbers. Last year, the administration’s student debt forgiveness was ruled illegal.
With the federal government continuing to borrow more, “lawmakers should be feeling the pressure to bring it down,” says Maya MacGuineas, president of the non-profit public policy organization.
“With only four months left in the fiscal year, the United States has borrowed $1.2 trillion, a shocking $4.9 billion per day on average. Clearly, we need to figure out our fiscal situation soon, before things get more out of control,” Ms. MacGuineas said.
“With rising interest rates, persistent inflation, and looming trust fund insolvency, there is much more to be done to correct our fiscal path.”
By Andrew Moran
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