The federal budget deficit shot up to $1.1 trillion in the first six months of fiscal year 2023, which is $430 billion more than the deficit at the same point last year, according to an analysis released Monday by the Congressional Budget Office (CBO).
Government spending was 13% higher so far this year compared to 2022, while revenues dropped 3%, the CBO said.
Higher interest rates are a main driver of this year's higher deficit, as the government paid $90 billion more in interest payments in the first half of fiscal year 2023 compared to 2022.
Outlays for mandatory spending programs have also jumped this year, with spending on Social Security going up 10% and spending on Medicare rising 14%.
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Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said Monday that lawmakers have "done little to write a budget and figure out a plan for how to slow this endless flow of borrowing."
"Budgeting requires tradeoffs – often painful ones that politicians don’t want to grapple with," MacGuineas said in a statement. "However, that is what they were elected to do, and they should consider the needs of both current and future Americans in upcoming fiscal negotiations. We simply cannot afford to ignore our unsustainable borrowing any longer."
The U.S. bumped up against the $31.4 trillion debt limit in January, prompting a battle on Capitol Hill between Republicans, who want to cut spending in exchange for raising the debt ceiling, and Democrats, who want to raise the debt ceiling without any conditions.
A battle is also brewing over the federal government's 2024 budget. President Biden submitted a blueprint to Congress last month that includes a 25% minimum tax on the wealthiest 0.01 percent and rollback of tax cuts implemented by former President Trump. The blueprint is likely dead-on-arrival in the GOP-controlled House, where Republicans have pledged to rein in spending.
