The monthly federal deficit hit a record $249 billion in November — $57 billion wider than the same month last year — as federal spending also hit new highs in consecutive months, while tax revenues fell.
It came after the deficit fell, according to Biden, by $1.4 trillion — although the nonpartisan Bipartisan Policy Center attributed the deficit decline to increased tax revenue and lower federal spending, which came after the end of Covid-related spending.
The deficit is $57 billion higher than in November 2021 — a record-breaking year-over-year change. Federal spending is up $28 billion from last year to $501 billion in November 2022, according to the Treasury Department.
Increased tax revenue was responsible for reducing the deficit, with revenue falling $13 billion year-over-year to $252 billion.
The federal deficit hit a record $249 billion in November, as federal spending hit record highs in consecutive months as tax revenue fell
It comes after the deficit fell by $1.4 trillion, according to President Joe Biden, although the nonpartisan bipartisan Policy Center said the deficit reduction was due to increased tax revenue and lower federal spending, which came after Covid-related spending. Expired
The deficit is still $57 billion higher than in November 2021, with federal spending up $28 billion from last year to $501 billion in November 2022, according to the Treasury Department. Revenues fell $13 billion year-over-year to $252 billion, although increased tax revenue was responsible for narrowing the deficit.
The drop in revenue was due to a small drop in personal tax withholding, a 64 percent increase in tax refunds and a 98 percent drop in Federal Reserve income.
The spending was driven, in part, by an 18 percent — or $14 billion — increase in Medicare spending and a 94 percent increase in education costs thanks to Biden’s student loan forgiveness programs.
The Treasury’s interest costs on public debt rose 53 percent, or $19 billion, in November, but this was largely offset by a $17 billion drop in tax credits for children and low-income workers.
Treasury interest payments increased by $48 billion, or 87 percent, in the first two months of fiscal year 2023.
The Treasury deficit for the first two months of fiscal year 2023 was 6 percent, or $20 billion, at $336 billion, with outlays down 2 percent and revenues up 1 percent from the year-earlier period.
The deficit is unlikely to shrink again, according to the Wall Street Journal, with government spending expected to either stay the same or increase through aid programs.
The federal budget deficit totaled $1.38 trillion this year — down from $2.78 trillion in fiscal 2021.
Government spending could be a big talking point after Republicans take over the House of Representatives in 2023.
The new Congress may clash over federal spending, Social Security, Medicare and the debt ceiling.
House Republican Leader Kevin McCarthy said in October that he would stop raising the nation’s debt limit, telling Punchbowl News that ‘we’re not just raising your credit card limit.’
However, the said interview was given after the speaker of the House, who is currently in dispute, is more likely to be elected.
Spending can be curbed by fiscal weapons in the GOP unless Democrats are willing to go along with budget cuts.
While Biden took credit for the deficit reduction in October, Maya McGuinness, chairwoman of the Committee for a Responsible Federal Budget, criticized Biden’s victory lap as irresponsible.
“All of the decline in deficits between 2021 and 2022 can be attributed to the expiration of temporary Covid relief, not to an era of renewed fiscal responsibility,” she said in a statement.
“In fact, the deficit would have been nearly $400 billion lower had the Biden administration not decided in August to implement an inflationary, expensive and regressive student loan cancellation plan,” he noted.
The Department of Education saw a $378 billion spending increase after Biden decided to cancel some student loans in August, which increased the debt.
However, Biden argued in his remarks that Democrats are not ‘big spenders’.
“Now, listen to me carefully: Republicans in Congress like to call Democrats ‘big spenders,’ and they’re always clamoring for lower federal spending,” he said.
But Republicans, he warned, would hurt the economy by cutting Social Security and Medicare by cutting taxes on the wealthy.
‘If you’re worried about the economy, you need to know this: The Republican leadership in Congress has made it clear that they will crash the economy next year, threatening the full faith and credit of the United States for the first time in our history. , putting the United States in default,’ Biden said.