The federal government's budget deficit skyrocketed to $1.69 trillion in fiscal year 2023. The figure reflects a 23% increase compared to last year ($1.37 trillion).
The Treasury Department declared that the deficit was higher than any year before the pandemic. Likewise, this number puts an end to two consecutive years of decline (2021 and 2022) after reaching its peak ($3.13 trillion) in 2020.
Mts 0923 by Veronica Silveri on Scribd
According to Treasury Secretary Janet Yellen, "Falling revenues are a significant contributor to the 2023 deficit, underscoring the importance of President Biden’s enacted and proposed policies to reform the tax system." However, other actions taken by the administration such as Social Security payments, Medicare and "interest on public debt" increased, contributing to the rise.
In 2023, total income fell 9% compared to 2022 ($457 billion) and expenses were reduced very little ($137 billion). Additionally, Social Security spending rose to $1.41 trillion (up 10%) and Medicare senior health care spending rose 4% ($1.02 trillion).
The deficit could increase
Despite the negative data, Yellen is optimistic. The secretary indicated that the administration is "committed to addressing challenges to our long-term fiscal outlook" and declared that "the U.S. economy remains resilient despite global headwinds."
However, the Congressional Budget Office warned that in a matter of a decade - if no action is taken in current tax and spending legislation - the deficits may equal or be greater than those recorded at the time of the Covid-19 pandemic. The figure is expected to reach $2.13 trillion by 2030 due to increased interest, federal spending, and public health and pension costs.
Budget Summary With Adjusted Differences Report September 2023 by Veronica Silveri on Scribd
