At $1.7 Trillion, Our Deficit Is Much Too High
The U.S. Treasury Department released the final Monthly Treasury Statement for Fiscal Year 2023 today, confirming the budget deficit totaled $1.7 trillion in FY 2023. After adjusting for the enactment and reversal of the President’s student debt cancellation plan, the deficit roughly doubled between FY 2022 and 2023 from less than $1 trillion to roughly $2 trillion.
The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:
We are a nation addicted to debt. The deficit totaled $1.7 trillion in Fiscal Year 2023, but we actually borrowed $2 trillion when you fix the accounting around President Biden’s reversed student debt cancellation plan. That means borrowing doubled from last year. With the economy growing and unemployment near record lows, this was the time to instill fiscal responsibility and reduce our deficits.
Instead, we now face the prospect of paying more to finance the debt we already incurred, let alone the trillions of dollars we are projected to borrow over the coming decade. Interest rates on U.S. Treasury securities are the highest they’ve been in more than 15 years. The federal government spent more on interest than children in 2023, and we’ll spend more on interest than national defense by 2027. In the face of legitimate emergency needs like natural disasters or foreign conflicts, these interest burdens mean we are not as nimble as we otherwise could be to respond.
We need long-term solutions to get our fiscal house in order, beginning with establishing a bipartisan fiscal commission. A commission would provide a platform for lawmakers and experts to have the tough discussions about our massive national debt and how to change our unsustainable fiscal course. Deficits doubling, interest rates rising, major trust funds facing insolvency within the next decade, and emerging security threats are all warnings. To continue to be the strongest country in the world, we should use this as an opportunity to finally fix our nation’s debt.