Treasury warns budget deficit up 13% compared to this time last year, debt reaching $34 trillion
"The growth in spending continues to outpace the growth in tax collections. This is why our national debit is heading toward $34 trillion. It cannot go on forever without serious economic consequences," says the leader of the Tax Foundation.
The U.S. government ran a budget deficit of $381 billion so far into the 2024 fiscal year, which represents a 13% increase from this same time period last year.
The deficit is $44 billion higher than it was at the end of November 2022, according to the latest data released by the U.S. Department of the Treasury.
Congress passed a "laddered" continuing resolution in November with a final expiration date of February 2. Conservative House Republicans have been calling for a reduction in federal spending to reduce the budget deficit. Congress must pass another spending bill to keep the government funded past Feb. 2.
The specific cuts the House GOP is considering remains unclear at this time, but any reduction in spending is likely to hit roadblocks in the Democratic-led Senate. Senate Majority Leader Chuck Schumer, D-N.Y., has criticized previous GOP attempts to cut domestic spending levels.
In September, House Republicans were trying to cut annual spending by about $120 billion, which still would not balance the budget. Congressional Democratic leaders were critical of their approach at the time.
Senate congressional leaders are currently debating a foreign assistance package that would provide additional aid to Ukraine and Israel as well as humanitarian assistance for Palestinian refugees along with money for U.S. border security. Senate leaders said on Tuesday that both sides were closer to a deal, but a formal agreement hasn't been reached yet.
"With regard to the border discussion, I think it's pretty safe to say that we've made some significant progress, but we obviously aren't there," McConnell said at the Capitol during his weekly news conference on Tuesday.
On the House side, Republicans have argued that additional aid for Israel and Ukraine should be paid for or "offset" by equivalent spending reductions. Schumer has said that such foreign assistance does not need to be paid for since it is considered emergency spending.
Senators are still in Washington negotiating on the package but the House has left town for the holidays.
Scott Hodge, president emeritus and senior policy adviser at the Tax Foundation, a nonpartisan tax policy 501(c)(3) nonprofit, said the U.S. Treasury reporting a 13% increase in the deficit compared to November 2022 shows the U.S. government continues to go down the wrong path when it comes to fiscal policy.
"It is being driven by federal spending, which is up by $152 billion, a 17% increase compared to the same month in 2022. The monthly deficit would have been worse if decent economic growth hadn’t boosted federal tax collections by $108 billion, or 19%," Hodge told Just the News.
"The problem with the federal budget is basic math—the growth in spending continues to outpace the growth in tax collections. This is why our national debit is heading toward $34 trillion. It cannot go on forever without serious economic consequences," he added.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, shared a similar perspective on the matter. "The longer we allow our debt to worsen, the less room we ultimately have to respond to the kinds of global emergencies we’re seeing in the world today," she said.
"This leaves policymakers with a choice: make the hard choices today by paying for our priorities and putting the national debt on a sustainable trajectory, or saddle the next generation with an even worse situation," she added.
The national debt in January of 2020 was $17.2 trillion, according to historical data from the Peterson Foundation. By contrast, the national debt is currently $33.9 trillion, according to the U.S. Treasury.