US reports third largest budget deficit
WASHINGTON:
The US budget deficit rose to $1.833 trillion for the fiscal year 2024, the highest outside the Covid era, as interest on the federal debt topped $1 trillion for the first time and spending on the Social Security retirement programme, health care and the military increased, the Treasury Department said on Friday.
The deficit for the year ended 30 September was up 8%, or $138 billion, from the $1.695 trillion recorded in fiscal 2023. It was the third largest federal deficit in US history, after the pandemic relief-driven deficits of $3.132 trillion in fiscal 2020 and $2.772 trillion in fiscal 2021.
The 2023 deficit had been reduced by the reversal of $330 billion of costs associated with President Joe Biden’s student loan programme after it was struck down by the US Supreme Court. Without this anomaly, it would have exceeded $2 trillion.
The sizable 2024 budget gap of 6.4% of gross domestic product (GDP), up from 6.2% a year earlier, could pose problems for Vice President Kamala Harris’s arguments ahead of the 5 November presidential election that she would be a better fiscal steward than Republican opponent Donald Trump.
A fiscal think-tank, the Committee for a Responsible Federal Budget, has estimated that Trump’s plans would add $7.5 trillion in new debt, more than double the $3.5 trillion in Harris’ proposals.
White House budget director Shalanda Young highlighted the strong growth of the US economy and the Biden administration’s investments in clean energy, infrastructure and advanced manufacturing.