Every month the U.S. Treasury releases data on the federal budget, including the current deficit or surplus. The following contains budget data for August 2024, the eleventh month of fiscal year (FY) 2024.
- Federal Budget Deficit for August 2024: $380 billion
- Federal Budget Surplus for August 2023: $89 billion
The federal government ran a deficit of $380 billion in August 2024, $469 billion more than the surplus of $89 billion recorded in August 2023. It is important to note that outlays were reduced by $330 billion in August 2023 due to budgetary adjustments stemming from the Supreme Court's decision to overturn the Administration’s plan to cancel student debt for many borrowers. Additionally, certain payments were shifted into August 2024 because September 1, 2024, fell on a weekend, increasing spending in August. Adjusting for those two effects, the August 2024 deficit was $58 billion more than the same month last year.
Spending in August 2024 was $687 billion, $493 billion more than in August last year, although the large difference is mainly attributable to the student loan adjustment and the timing shift. Controlling for those adjustments, outlays were up $83 billion compared to August 2023. The increase in adjusted outlays was driven by several categories--the Department of Education recorded an additional $28 billion this August, the Department of Veterans Affairs increased outlays by $19 billion, spending on national defense was up $13 billion, and net interest on the public debt increased by $11 billion. Revenues in August 2024 were $23 billion above collections from a year ago, mainly due to increased collections of individual income and payroll taxes ($16 billion) and corporate income taxes ($4 billion).
Cumulative Federal Deficit
- Cumulative FY24 Deficit: $1.9 trillion
- Cumulative FY23 Deficit (through August 2023): $1.5 trillion
This year’s cumulative deficit is $373 billion above last year’s level. However, the $330 billion adjustment related to student loan cancellation, which significantly reduced outlays last fiscal year, is the primary driver for this year's seemingly larger deficit. Additionally, because October 1 fell on a weekend in both calendar years 2022 and 2023, certain federal payments were shifted into the previous fiscal year in both FY23 and FY24. Furthermore, September 1, 2024, also fell on a weekend, inflating outlays in August FY24. Without those effects, the deficit for FY24 through the end of August would be very close to the corresponding total from the previous year.
For the first 11 months of FY24, total outlays were $6.3 trillion, $792 billion higher than the same period in the previous year. Adjusting for the aforementioned shifts, spending was $391 billion above the same period last year. Two areas of the budget have experienced rapid increases so far this year. Net interest has grown by $213 billion (34 percent) relative to the first 11 months of last fiscal year, primarily due to higher interest rates; spending for Social Security benefits has risen by $98 billion (8 percent) because of cost-of-living adjustments and an increased number of beneficiaries. In addition, spending on Medicare and defense has increased significantly this fiscal year. Partially offsetting those increases was a $51 billion decrease in outlays from tax credits related to the government's response to the COVID-19 pandemic. Other categories of outlays that decreased include spending by the Pension Benefit Guaranty Corporation because certain one-time payments were made to pension plans in FY23 but not in FY24 ($29 billion) and spending related to the Supplemental Nutrition Assistance Program ($28 billion).
Total revenues increased by $419 billion in the first 11 months of FY24 compared to the previous year. The main drivers were a significant increase in collections of individual income ($221 billion more than the same period in FY23), corporate income ($97 billion), and payroll taxes ($83 billion). Such revenues have been higher in FY24 than through the same period in FY23, in part because the IRS allowed certain locations that suffered natural disasters to defer payments until this fiscal year. In addition, higher wages and salaries boosted individual and payroll tax collections and the moratorium on the Employee Retention Tax Credit has significantly reduced individual income tax refunds.
National Debt
- Debt Held by the Public at the end of August 2024: $28.1 trillion
- Debt Held by the Public at the end of August 2023: $26.0 trillion
Despite a healthy economy, spending has been rapidly outpacing revenue collections. The unsustainable upward trajectory of deficits and debt argues for bipartisan solutions to improve the country’s fiscal outlook. The Peterson Foundation’s recent Solutions Initiative provides a compendium of approaches to improve that outlook.
