The U.S. federal deficit rose to $1.7 trillion in Fiscal Year (FY) 2023, recording the third-highest year on record, exceeded only by pandemic-plagued 2020 and 2021, the U.S Congressional Budget Office (CBO) reports.
The federal deficit in FY 2023, which ended September 30, 2023, is up $0.3 trillion from the FY 2022 deficit – and would’ve been even higher without the effects of Pres. Biden’s student loan cancellation, which was overturned by the Supreme Court in June.
CBO estimates that, if the actions concerning the Administration’s plan for student loan cancellations were excluded from both years, the deficit for 2022 would have been smaller and the deficit for 2023 would have been larger. As a result, the FY 2023 deficit would have been more than double that of FY 2022:
- The FY 2022 deficit would have been $0.9 billion, instead of $1.3 trillion.
- The FY 2023 deficit would have been $2.0 billion, instead of $1.7 trillion.
Thus, without the effects of debt cancellation (and excluding the effects of timing shifts), the deficit would have grown by nearly $1.1 trillion from 2022 to 2023. “That increase results from a combination of lower revenues and higher outlays, mostly for major mandatory programs and for payments of interest on the debt,” the CBO reports.
While the federal government’s outlays declined by an estimated $141 billion (or 2 percent) in FY 2023, revenues fell even more, by an estimated $455 billion (or 9 percent).
“At a time when the economy is growing and unemployment remains near historic lows, this should have been a time to reduce deficits in order to help us better prepare to respond to future economic downturns or foreign crises,” Committee for a Responsible Federal Budget Pres. Maya MacGuineas said in a statement, reacting to the news.
“With deficits doubling, interest rates surging, major trust funds on course to be exhausted in a decade, and new security threats emerging – everything is telling us it’s time to address the debt,” MacGuineas added.
Meanwhile, the nation’s total public debt outstanding now exceeds $33.5 trillion.
The business and economic reporting of CNSNews.com is funded in part with a gift made in memory of Dr. Keith C. Wold.