- The U.S. government posted a budget deficit of $1.695 trillion for fiscal year 2023, marking a 23% increase from the previous year. This deficit is the largest since the COVID-19 pandemic-induced deficit of $2.78 trillion in 2021.
- The deficit increase was driven by a drop in revenues and rising outlays for programs such as Social Security, Medicare, and interest payments on the federal debt.
- This budget deficit comes at a time when President Joe Biden is seeking $100 billion in new foreign aid and security spending, including $60 billion for Ukraine and $14 billion for Israel, in addition to funds for U.S. border security and the Indo-Pacific region.
- The deficit could intensify fiscal disputes between Biden and Republicans in the House of Representatives. Republicans have been pushing for spending cuts, leading to a near default in early June 2023 over the debt ceiling.
- In September, the final month of the fiscal year, the deficit decreased to $171 billion from $430 billion in September 2022.