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US budget deficit balloons as receipts fall, spending rises

The US budget deficit in the first nine months of the fiscal year nearly tripled from a year ago, the Treasury Department said, citing lower receipts and higher spending.

The deficit for the period between October 2022 and June this year came in at US$1.39tn – up from US$515bn the same period a year ago.

Receipts slipped 11% compared with last year, while outlays rose by 10%.

Spending on major health care programs such as Medicare and Medicaid rose sharply while social security payouts jumped 11%, thanks in part to an 8.7% cost-of-living adjustment for retirees and other recipients, the largest such increase in four decades.

The government has also paid US$52bn so far to cover deposits at three regional banks that failed this spring, money that will come from the Federal Deposit Insurance Corp's deposit insurance fund and a special assessment on other big banks.

Federal Reserve earnings are down US$93bn, while interest on the public debt rose US$131bn to US$652bn in the year-to-date period, due mainly to higher interest rates, according to the Treasury.

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