The federal government wound up its fiscal year in September with a deficit just shy of $1.7 trillion, the U.S. Department of the Treasury announced Friday.
Wrapping up a year in which some thought the shortfall could exceed $2 trillion, the U.S. ended up with an imbalance of $1.695 trillion, up about $320 billion, or 23.2%, from fiscal 2022.
The huge deficit came as revenue fell $457 billion from a year ago and expenses decreased by just $137 billion. Outlays for the year totaled $6.134 trillion.
The budget shortfall adds to the staggering U.S. debt total, which stood at $33.6 trillion earlier this week. The deficit level was eased somewhat when the Supreme Court voided President Joe Biden’s effort to erase billions in student loan debt.
That number has swelled by more than $10 trillion since the first quarter of 2020, when the Covid-19 pandemic hit and pushed the government into a spending spree aimed at making up for the damage done to the economy.
Of the government outlays last year, some $659 billion went for net interest on the accumulated debt, up from $475 billion in fiscal 2022.
Treasury Secretary Janet Yellen said the administration is “committed to addressing challenges to our long-term fiscal outlook” and pointed out several measures she said are going to bring down the deficit over the next decade.
“The U.S. economy remains resilient despite global headwinds,” Yellen said. “Previous expectations that the U.S. would fall into recession over the course of 2023 have not borne out.”
Financing the debt has gotten significantly more expensive over the past year as the Federal Reserve has jacked up benchmark interest rates in an effort to combat inflation. The central bank has raised its key lending rate by 5.25 percentage points, and Treasury yields have responded in kind. The 10-year Treasury note has been flirting with a 5% yield. It was less than 1% through 2020.
The budget report comes the same week Biden asked Congress to allocate $105 billion for “national security priorities,” including $61 billion for Ukraine, along with humanitarian assistance in Israel and Gaza.
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