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The US federal government’s budget deficit hit UD$1,1 trillion in the first half of the fiscal year, a 63 percent jump over a year ago, driven by higher outlays for education, health care benefits and debt interest payments.
The deficit for March was US$378 billion, according to monthly budget figures released Wednesday by the Treasury Department. Year-on-year comparisons are adjusted to account for calendar differences. Interest payments on outstanding debt in the first six months of fiscal 2023 totaled US$384 billion, an increase of 32 percent over the same period last year. That expense has climbed as the Federal Reserve lifted its benchmark interest rate to combat inflation, forcing the government to pay higher returns to purchasers of US Treasury securities.
The Department of Health and Human Services also saw its outlays rise to $843 billion in the first half, a jump of 5 percent, due largely to increasing Medicare and Medicaid expenses. Department of Education outlays increased 76 percent to US$124 billion in the first half, due in part to costs associated with the Biden administration’s loan forgiveness program, a Treasury official said on a call with reporters. Federal Deposit Insurance Corp. payments to cover depositors at the failed Silicon Valley Bank and Signature Bank added US$29 billion to outlays in March, the official said. However, that expense is covered by previous receipts that originate with fees paid by FDIC member banks. – Bloomberg
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