U.S. Deficit Skyrockets: Fiscal Challenges Ahead

The U.S. federal deficit is projected to reach $1.834 trillion in fiscal 2024, driven by rising debt interest and increased spending on Social Security and Medicare. Political debates between Vice President Kamala Harris and Republican rival Donald Trump highlight differing fiscal strategies amid growing economic challenges.

The Congressional Budget Office has projected a staggering U.S. federal deficit of $1.834 trillion for the fiscal year 2024, marking the highest in the era following COVID-19. This increase is primarily attributed to surging debt interest costs and elevated expenditures on Social Security and Medicare.

The latest estimate, which arrives just before the U.S. Treasury Department's comprehensive budget report, reveals an 11% rise from the $1.7 trillion fiscal 2023 gap. Although this projection is slightly under the CBO's June forecast of $1.9 trillion, it underscores the enduring fiscal challenges.

Vice President Kamala Harris is emphasizing her commitment to fiscal responsibility, contrasting with Donald Trump's plans which a fiscal think-tank warns could significantly exacerbate national debt. With baseline deficits projected to escalate by $22 trillion over the next decade, the financial trajectory remains a contentious issue.

(With inputs from agencies.)