U.S. Federal Budget Deficit Worsens, Raising Debt Ceiling Concerns
By The U.S. federal budget deficit is widening rapidly, raising the risk of the Treasury running out of cash earlier than expected amid a debt-ceiling standoff.[0] According to the Congressional Budget Office, the deficit has risen to $460 billion in the first four months of fiscal year 2023, a $201 billion increase from the same period in the previous year.[1]
The government's revenues, obtained through taxation, were $1.47 trillion during the period of October to January, which was 3% lower than the same period the previous year. Expenditures, however, were $1.9 trillion, or 9% higher than the year before.[2] The Treasury Department confirmed that the $39 billion deficit in January was due to a dip in revenues and some one-time costs.[3] In January, expenditures totaled $486 billion, an increase of $140 billion (4%) from the same period in the prior year. This was partially caused by the $36 billion bailout of the Central States Pension Fund, as well as the communications spectrum auction from the previous year that reduced outlays for January 2022.[3]
Last month, after the federal government reached the statutory debt ceiling of $31.4 trillion, Treasury Secretary Janet Yellen employed specific accounting techniques to extend the time before her department would be out of money.[0] She stated that the maneuvers would continue until the beginning of June at the latest in the middle of January.[4]
It is anticipated that Republicans will use the increasing budget deficit to assert that the economic plans of the Biden government have put the US onto an imprudent financial path.[4] The Republican Party is demanding reductions in expenditure in exchange for increasing the debt ceiling.[4] In his State of the Union address on Tuesday, President Joe Biden refused to accept any terms and declared that the administration of his Republican predecessor, Donald Trump, had added more to the national debt than any other.[4]
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, declared that the Treasury's figures for today affirm that our country is reverting to its old habits of borrowing excessively. She went on to say that in the first third of the fiscal year, approximately $460 billion have been borrowed, which is equivalent to $3.8 billion daily.[2]
The monthly budget from the Treasury, usually available in the middle of the month, has not been released yet.[0] Bloomberg reports that it reported a $421 billion deficit three months through December, which is 12% worse than in 2021.[0]
0. “US Federal Budget Deficit Rapidly Widening as Treasury Could Run Out of Cash Sooner Than Expected” Watcher Guru, 9 Feb. 2023, https://watcher.guru/news/us-federal-budget-deficit-rapidly-widening
1. “Federal government deficit narrowed to $38.8B in January” Seeking Alpha, 10 Feb. 2023, https://seekingalpha.com/news/3934932-federal-government-deficit-narrowed-to-388b-in-january
2. “Federal deficit up 80% through first four months of fiscal year” Washington Examiner, 10 Feb. 2023, https://www.washingtonexaminer.com/restoring-america/patriotism-unity/federal-deficit-up-80-through-first-four-months-of-fiscal-year
3. “US posts $39 billion deficit for January as revenues fall, spending jumps” FISM TV, 10 Feb. 2023, https://fism.tv/us-posts-39-billion-deficit-for-january-as-revenues-fall-spending-jumps
4. “US Budget Deficit Widens Rapidly, Threatening Debt-Limit Timeline” Yahoo! Voices, 8 Feb. 2023, https://www.yahoo.com/now/us-budget-deficit-widens-rapidly-214901750.html
