US govt announces budget deficit

The U.S. government has announced a budget deficit of $1.695 trillion for its 2023 fiscal year, marking a 23% increase from the previous year. This increase is primarily attributed to a decline in revenues, higher spending on social security and Medicare, and increased federal debt payments.

This deficit is the largest since the COVID-19 pandemic triggered a $2.78 trillion deficit in 2021. During President Biden’s first two years in office, there were reductions in the deficit figure. Federal spending and debt have been contentious political issues in the United States, with the country narrowly avoiding a default earlier in the year.

The Congressional Budget Office has cautioned that, based on existing tax and spending laws, the U.S. deficit could potentially reach $2.13 trillion by 2030. While this would be a substantial deficit, it would not surpass the record high of $3.13 trillion recorded in 2020. The sustainability and management of government deficits will continue to be a significant policy concern in the United States.