Federal Deficit Increases

Per the Congressional Budget Office (CBO), the federal deficit increased to $1.2 trillion for the first eight months of this fiscal year, an increase of $38 billion from the shortfall recorded during the same period last year. Spending grew by $332 billion, or 8 percent, from October through May, compared to the same period the previous year. Interest payments on the debt accounted for $185 billion of that sum, a 42 percent increase, primarily because of higher interest rates.

Entitlement programs continued to increase. Social Security benefits rose by $74 billion, or 8 percent, due to increases in the average benefit payment along with a rising number of beneficiaries. Medicare spending increased by $51 billion, or 10 percent, largely because of increased benefit payments in Medicare Advantage programs. Revenue grew by $294 billion, or 10 percent, but some of that increase was the result of the postponement of some 2023 tax deadlines for taxpayers, who live in federally declared disaster zones.