The Congressional Budget Office (CBO) has projected that the federal budget deficit for fiscal year 2024 will be approximately $1.6 trillion. This figure, although slightly lower than the $1.7 trillion deficit recorded in 2023, remains historically high and is a sign of ongoing fiscal challenges facing the United States.
One of the primary reasons for the elevated deficit is the significant increase in government spending compared to revenues. In the first quarter of FY 2024, the federal government reported receipts of $1.1 trillion, while outlays reached $1.6 trillion, resulting in a $509 billion deficit for the quarter alone. This represents a 21% increase from the same period in FY 2023.
CBO BOOSTS 2024 US BUDGET DEFICIT ESTIMATE TO $1.9T FROM $1.5T
Just a casual 27% whoopsies pic.twitter.com/E5tIka33oQ
— 𝐏𝐢𝐧𝐞𝐜𝐨𝐧𝐞 𝐌𝐚𝐜𝐫𝐨 (@pineconemacro) June 18, 2024
Interest payments on the national debt have been a major contributing factor to the rising deficit. The cost of servicing the debt hit $221 billion in the first quarter, an increase of about $73 billion from the previous year. Additionally, expenditures related to resolving bank failures also added to the outlays.
The CBO's long-term projections are equally concerning, with deficits expected to grow by 62% over the next decade, reaching nearly $2.6 trillion by fiscal year 2034.
Who’s to blame for record deficits? Democrats? Yes. Republicans? Yes, at least the big government ones that voted to send nearly $200 billion to Ukraine.
US budget deficit to reach $1.9 trillion in 2024, Congressional Budget Office finds https://t.co/q1lfexLq2x
— Rand Paul (@RandPaul) June 18, 2024
This growth is driven by several factors, including the aging population and rising healthcare costs per beneficiary.
In response to these challenges, the Biden administration has proposed measures aimed at reducing the deficit by making the tax system fairer and cutting wasteful spending. Key initiatives include implementing a minimum tax on billion-dollar corporations, increasing the Medicare tax rate for high earners, and closing tax loopholes that benefit the wealthy .
However, Republicans have criticized the administration for not doing enough to address the deficit. They argue that more drastic measures are needed, such as reducing discretionary spending and reforming entitlement programs. The recent Fiscal Responsibility Act, a bipartisan deal, capped discretionary spending and is expected to reduce the deficit by about $100 billion in 2024.
As the fiscal situation continues to evolve, policymakers are under increasing pressure to implement effective solutions to curb the rising deficit and ensure long-term economic stability.
There was a movie a number of years ago called “Dave”. The story was about an apolitical guy who was a lookalike to a brain dead President. The main story is unimportant to my point. There was one scene where he needed 10 million dollars for a project to help poor kids. He called in his local accountant friend to find him 10 million dollars in the budget to keep that project alive. This is what we need in government today. As part of OMB, there should be a department whose sole job is to find waste and eliminate it. An example is something I see on television where a phone with close captioning is available for free through a government program to anybody who has a hearing problem. WHY is not that program means tested so that people who can afford to pay, do pay. That is a small program but there are thousands like it costing billions maybe trillions of dollars. No more NO BID contracts or BRIDGES TO NOWHERE or pet projects from Senators or Congress people that are not something that helps America but instead helps a friend of theirs that is running a small lab somewhere seeing how fast a grasshopper can run on a treadmill for 10 million dollars.