Every month the U.S. Treasury releases data on the federal budget, including the current deficit. The following contains budget data for January 2020, which was the fourth month of fiscal year (FY) 2020.
The deficit for January 2020 is in contrast to the small surplus from January 2019. In both years, certain federal payments were shifted into December because January 1st was a holiday. In addition, certain federal payments in 2020 were shifted into January because February 1st fell on a weekend. Without such timing shifts, January 2020 would have had a deficit of $1 billion and January 2019 would have had a deficit of $12 billion.
The cumulative deficit through the first four months of FY20 was $79 billion larger than it was through the first four months of FY19. However, in 2020, certain federal payments were shifted into January because February 1st fell on a weekend. Without those shifts, the deficit in the first four months of FY20 would have been just $24 billion larger than it was last year.
The increase in the cumulative deficit reflects a $147 billion increase in outlays partially offset by a $68 billion increase in revenues.
While the deficit varies from month to month and some months may even record a surplus — for example, in April, when taxpayers are submitting their personal income taxes — debt and deficits are on an unsustainable upward trajectory. The CBO projects that debt held by the public could rise to 180 percent of gross domestic product (GDP) by 2050 if no changes are made to current laws. That level of debt would far exceed the 50-year historical average of approximately 40% of GDP.
Why are such high levels of debt so concerning? There are many reasons that Americans should be concerned about the rising national debt — particularly if you are concerned about economic growth, investments in our nation’s future, and preservation of our social safety net.