December 9, 2023
The CBO cited the bank failures, public debt, and federal programs as a major cause of the deficit.
The Congressional Budget Office (CBO) has released concerning numbers regarding the federal budget deficit. According to an estimation shared on Dec. 8, the deficit in the federal budget has reportedly hit $383 billion in just the past two months.
The budget keeper, a nonpartisan position, claimed that in November alone the United States government accrued a deficit of $317 billion, which is $68 billion higher than the deficit that was recorded for this same period during last year’s estimation. Furthermore, it’s $250 billion higher than the reported deficit reported by the Treasury Department just a month before, The Hill reported.
The CBO posited that the numbers could be moderated by a slight increase in estimated revenue in October and November. There was a 19 percent increase from last year’s period, but the deficit recorded over the last two months of this year still beat out the revenue increase by $47 billion.
The budget office outlined several specific sectors that “spending had increased substantially” over the initial estimates.
In the report, there was an increase in outlays for the Federal Deposit Insurance Corporation to the tune of $63 billion, as they were tasked with “facilitating the resolution of bank failures that occurred in 2023.”
The CBO explained, “The FDIC expects to recover much of that amount by continuing to liquidate the banks’ assets and by collecting higher premiums from FDIC-insured institutions over the next several years.”
The second largest increase from the 2022 two month period last year came from interest rates being much higher than they were before, causing a large increase in the public debt.
Other concerning aspects of the deficit increased were caused by more spending on Social Security benefits, Medicare and Medicaid, Energy and Defense Department, as well as an 18 percent increase in the spending for the Department of Veteran Affairs.
The CBO explained the changes were, “mostly because of increased spending per person and veterans’ increased use of health care facilities, [as well as] because last year the administration sold a substantial amount of oil from the Strategic Petroleum Reserve. [And] some of the largest increases were for military personnel and for operation and maintenance.”
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