(The Center Square) – The U.S. Congressional Budget Office released new data showing that in the last calendar year, the federal deficit has risen over $2 trillion.
The CBO released its monthly report on federal spending and revenue to show the increase, which is more than double the deficit levels just a few years ago. Before the COVID-19 pandemic, the fiscal year deficit did not top $1 trillion.
Now, Americans are in danger of $2 trillion becoming the new normal.
Recently, the federal figures are even worse. According to the CBO, the federal deficit has already hit $710 billion in the fist three months of the fiscal year.
Now, the federal government is on track to have interest payments on the national debt as its single largest expenditure.
So far, lawmakers have shown little sign of planning significant budget cuts.
“Zombie-Congress is headed in a bad direction,” U.S. Rep. Thomas Massie, R-Ky., wrote on X Tuesday. “Plan is to pass a tax cut bill (reconciliation) AND a spending increase (omnibus) … This one-two deficit punch will make bond buyers demand more interest to finance existing debt…”
“We will burn billions more in interest!!” he added.
Many economic and fiscal policy experts continue to raise the alarm about the rising deficit as well as the national debt, which is over $36 trillion and is expected to surpass $37 trillion later this year.
“The 5 year US Treasury yield has just hit 5 percent even as the real yield for the same horizon is above 2.6 percent,” Harvard Professor and former Secretary of the Treasury for President Bill Clinton and Director of the National Economic Council for President Barack Obama, wrote on X. “This confirms concerns about looming budget deficits and a rising neutral rate.”
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, pointed out the hypocrisy of Congress celebrating cutting spending last year only to raise it again the following year.
“There is absolutely no just justification for running a $2 trillion deficit in a year when the economy was strong and we were still fighting inflation,” MacGuineas said in a statement. “And what an expensive about face to have gone from 2023 – a year in which Congress passed legislation that reduced the debt by $1.3 trillion over ten years – to 2024, where they increased it by $1 trillion over the decade.”
Federal debt spending helps fuel inflation since debt spending is partially offset by printing more money, thus increasing the money supply and increasing inflation.
“Under Joe Biden, federal powers ballooned, turning states into mere subjects with $2 trillion deficits as a result,” Heritage Fellow Stephen Moore wrote on X.
