The Congressional Budget Office (CBO) estimated in a report released on Monday that the federal budget deficit surpassed $1.1 trillion in the first half of fiscal 2023.
According to the agency, the estimate is $430 billion larger than the gap seen during the same period last year since spending increased by 13% from the prior six-month period while income decreased by 3%.
The earnings of the majority of Federal Reserve banks were eliminated as a result of higher short-term interest rates, the CBO stated.
The Congressional Budget Office said in its most recent monthly budget assessment that the government received $2 trillion in revenue in the six months that began on October 1, 2022. The amount is $73 billion less than it was during the same time in fiscal 2022.
Revenues from income and payroll taxes decreased by 2%, or $33 billion, and payments from the Federal Reserve decreased from $61 billion to under $1 billion.
According to the most recent estimates, government spending increased over the course of the last six months compared to the same period last year, with outlays rising by 13 percent, or $357 billion. Overall, according to the CBO, spending between October and March totaled $3.1 trillion.
The increase is correlated with a projected net increase of $132 billion, or 11%, for the main required spending programs run by the government, such as Social Security and Medicare.
The CBO projected an increase in Social Security benefit spending of 10%, or $61 billion.
“Increases both in the number of recipients and in the average benefit payout, which grew principally due to cost-of-living adjustments,” is what the office attributed the increase to.
During the same time period, Medicare expenditures increased by an estimated $49 billion, or 14 percent, due to “changes in payment rates and in the types and quantity of services beneficiaries received,” according to the CBO. The office also reported that Medicaid spending increased by 8%, or $22 billion, as a result of higher enrollment brought on by changes in pandemic-era policies.
Other notable spending increases were also included in the report, such as the net outlays on interest on the public debt, which increased by $90 billion, or 41 percent, from the same period in fiscal 2022. According to the office, the adjustment was mostly brought on by interest rates being much higher than they were during the first half of fiscal year 2022. When the Federal Deposit Insurance Corporation “invoked a’systemic risk exemption’ in March in reaction to a couple of bank failures,” according to the office, expenditures soared by $29 billion. The current nationwide moratorium on student loan payments was also cited as a major factor in the Department of Education’s spending increasing by 75%, or $53 billion.