U.S. Budget Deficit Soars to $1.897 Trillion Amid Rising Interest and Spending

The U.S. budget deficit reached $1.897 trillion for the first 11 months of the 2024 fiscal year, largely due to higher interest rates and increased spending on social programs and defense. A key factor in the rise was the absence of last year's budget cuts linked to Joe Biden's student loan forgiveness, which was overturned by the U.S. Supreme Court.

The U.S. budget deficit surged to $1.897 trillion in the first 11 months of the 2024 fiscal year, the Treasury Department reported on Thursday. Annual interest costs on the public debt surpassed $1 trillion for the first time, marking a significant rise from the previous year's deficit of $1.525 trillion.

This fiscal increase is attributed to higher interest rates and the discontinued budget reductions associated with President Joe Biden's student loan forgiveness program, which was struck down by the Supreme Court. The Congressional Budget Office estimates the total deficit for fiscal 2024 to be $1.9 trillion, making it the largest since the COVID-19 pandemic era.

Government expenses for Social Security, Medicare, and defense programs contributed significantly to the rising deficit, with total outlays hitting $6.288 trillion. The Treasury's fiscal year-to-date interest costs soared to $1.049 trillion through August, reflecting both higher interest rates and a larger amount of public debt, which now exceeds $35 trillion.

(With inputs from agencies.)