The US budget deficit increased to 6.4% of GDP in 2024, up from 6.3% in 2023, despite higher tax revenue not covering rising debt costs. The Treasury Department released this data before the upcoming election, where Democratic Vice President Kamala Harris will face former Republican President Donald Trump.
By the end of the 2024 fiscal year, the deficit reached $1.833 trillion, an 8.0% rise from the previous year, making it the third-largest deficit in US history, following 2020 and 2021, which saw high pandemic spending. After a decrease in 2022, the deficit began to grow again in 2023.
High interest on the national debt contributed to the deficit’s rise. Treasury Secretary Janet Yellen emphasized the focus on long-term growth through investments in infrastructure, manufacturing, and clean energy while considering fiscal health.
A White House official criticized Republicans for tax cuts that lowered revenue and increased debt, and pointed out their push for further cuts. From October 2023 to September 2024, government revenue grew by 11.0% to $4.919 trillion, with more taxes paid due to higher employment and wages. However, spending rose 10% to $6.752 trillion, driven largely by debt servicing.
The increasing deficit showcases the ongoing struggle to balance economic growth with fiscal responsibility, a point likely to spark debates as the election nears.
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