The U.S. deficit is projected to roughly double this year, largely due to higher interest rates and lower tax revenue.\u00a0
The Committee for a Responsible Federal Budget, an organization that pushes for lowering the deficit, is projecting the federal deficit will double this year to total about $2 trillion for the fiscal year that ends Sept. 30. Marc Goldwein, senior policy director at the organization, told The Hill that high interest rates, lower tax revenues and high inflation resulting in higher Social Security and Medicare costs have all contributed to the rising deficit.
\u201cA big part of the story is just that there was sort of a one-time huge revenue surge in 2022 that\u2019s done,\u201d Goldwein said. \u201cBut the other stories are that we have structurally deficits really rising in 2023. And that\u2019s a lot of that is because of interest costs.\u201d
\u201cThese things add up,\u201d he added. \u201cIt\u2019s no one thing that\u2019s causing us to go from $1 trillion to $2 trillion. It\u2019s like six things.\u201d
The Congressional Budget Office\u00a0estimated last month\u00a0that the federal budget deficit\u00a0reached $1.6 trillion\u00a0in the 10-month period ending in July.
Goldwein also noted the official 2022 deficit numbers are about $4 billion higher than they should be due to the student loan cancellation because the Biden administration recorded it on last year\u2019s numbers even before the cancellation went into place. Therefore, their prediction is based on numbers that ignore the effects of the student debt cancellation that was later struck down by the Supreme Court.
This comes years after the U.S. hit record-shattering deficit levels in 2020 and 2021 that were largely due to the pandemic-era spending and borrowing. In 2020, the deficit\u00a0hit $3.1 trillion\u00a0and in 2021,\u00a0it hit $2.8 trillion.
\u201cWe\u2019re predicting this, but this is really based very heavily on things that the Congressional Budget Office has already set,\u201d Goldwein noted.
He also said he expects the deficit to go down in 2024 compared to this year. He said that over the next decade, the deficit will likely creep up to $3 trillion if there are no other \u201cpredictable shocks.\u201d
\u201cI do expect deficits are trending upward over time,\u201d he said. \u201cBut I do think they\u2019re more likely to fall than to rise in 2024.\u201d
The Washington Post\u00a0first reported on the organization\u2019s predictions.<\/p>\n\n\n\n