The U.S. federal budget deficit set a record for the month of November, jumping $57 billion from the same month last year to $249 billion, according to The Wall Street Journal Monday.
The cumulative federal deficit rose to $336 billion for the fiscal year 2023, which began in October 2022, slightly less than for the same period of time last year, the Treasury Department reported Monday. The annual federal deficit fell to just under $1.4 trillion last year — down from $3.1 trillion in fiscal year 2020 and $2.8 trillion in fiscal year 2021, according to the Government Accountability Office — in part due to reduced COVID-19 relief spending and economic recovery following a harsh slowdown during the pandemic, according to the WSJ.
However, this pace of deficit reduction is unlikely to continue, both because there are few one-time aid programs left to lapse and a possible economic slowdown in in 2023 might reduce tax returns, according to the WSJ. Additionally, elevated interest rates set by the Federal Reserve in a bid to hamper demand and blunt inflation have made borrowing more expensive for the federal government, contributing to a 53% increase in borrowing costs in November 2022 compared to the same time last year.
The record-breaking month comes just before Republicans are set to take control of the House in January, when the GOP is expected to make the deficit and spending a major issue, according to the WSJ. The party, which made a significant issue out of the debt ceiling during President Barack Obama’s tenure, signed off on several debt ceiling hikes when President Donal Trump was in the White House.
The U.S. national debt passed $31 trillion for the first time in early October, according to The New York Times.
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