Data shows that due to a decrease in both government revenue and expenditure, the federal budget deficit for the fiscal year 2023 was $1.7 trillion, an increase of $320 billion or 23% compared to the same period last year. This fiscal year ends on September 30th.
Key details: The US Treasury Department reported a 9% decrease in revenue in 2023, or $457 billion, while government spending or expenditure decreased by a relatively small 2%, or $137 billion.
The Ministry of Finance stated that the significant decrease in revenue was due to a decrease in personal income tax revenue due to the realization of capital gains, as well as a decrease in the Federal Reserve's funds due to rising interest rates.
The expenditure on paying public debt interest has increased by 23% this year, reaching $162 billion.
If the Supreme Court did not veto President Joe Biden's student loan relief plan in June, the gap in fiscal year 2023 would be even greater.
This is the third highest deficit on record after fiscal years 2020 and 2021.
Background: The latest deficit data comes at a time when the House of Representatives is paralyzed by the difficult election of a new Speaker, effectively putting Congress's finances and all other affairs on hold.
Biden has requested approval from lawmakers to provide over $100 billion in aid to Ukraine, Israel, and other priorities, but the prospects for immediate action are bleak. If the budget cannot be approved before November 17th, some governments will be closed.
At the same time, Federal Reserve Chairman Powell hinted on Thursday that the rapidly rising US debt level may become a problem in the future. He said at the Economic Club of New York: "Our current path is unsustainable, and we must leave this path as soon as possible."