Federal Deficit and Debt: January 2024

Every month the U.S. Treasury releases data on the federal budget, including the current deficit. The following contains budget data for January 2024, the fourth month of fiscal year (FY) 2024.

Current Federal Deficit

• Federal Budget Deficit for January 2024: $22 billion
• Federal Budget Deficit for January 2023: $39 billion

The federal government ran a deficit of $22 billion in January 2024 — $17 billion less than the deficit of $39 billion that was recorded in January 2023. However, since January 1 was a holiday, certain payments shifted into December in both years, decreasing outlays on net in January 2024 by $2 billion. Excluding the effects of both timing shifts, the year-over-year difference in the deficit would have been a $14 billion decrease.

Spending in January 2024 was up by $13 billion compared to last year, driven by increases in outlays for Net Interest ($18 billion more than in January 2023) and Medicare ($11 billion). Spending was also noticeably higher for the Department of Defense, Social Security, and the Department of Veterans Affairs. Partially offsetting those increases was, in particular, a $37 billion decrease in spending by the Pension Benefit Guaranty Corporation (PBGC) because payments to certain pension plans were made in January 2023 but not in 2024. Revenues in January 2024 were $30 billion above collections from a year ago, mainly due to increased collections of withheld income taxes ($20 billion more than in January 2023) and payroll taxes ($8 billion).

Cumulative Federal Deficit

• Cumulative FY24 Deficit: $532 billion
• Cumulative FY23 Deficit: $460 billion

This year’s cumulative deficit is $72 billion above last year’s level. However, because October 1 fell on a weekend in 2022 and 2023, certain federal payments were shifted into the previous fiscal year in both FY23 and FY24. Without those effects, and including the slight January 1 timing shift adjustment, the deficit for FY24 through the end of January would be $81 billion above last year’s corresponding total.

For the first four months of FY24, total outlays were $2.1 trillion, $184 billion higher than the same period in the previous year. Adjusting for timing shifts, spending was $193 billion above the same period last year. Two areas of the budget have experienced rapid increases so far this year. Net Interest has grown by $89 billion relative to the first quarter of last fiscal year, mostly due to higher interest rates; deposit insurance has risen by $62 billion because of actions related to bank failures in 2023. In addition, spending on Social Security, defense, and Medicare increased significantly in the first 4 months of the fiscal year. Partially offsetting those increases in outlays was a $39 billion decrease in spending by the PBGC because certain one-time payments were made to pension plans in FY23 but not FY24. Other categories of outlays that decreased were related to the government’s response to the COVID-19 pandemic ($18 billion), spending associated with the end of emergency funding for the Supplemental Nutrition Assistance Program ($18 billion), and the total for the Department of Education ($14 billion) because some transactions related to the student loan program were recorded in FY23 (but not in fiscal year 2024).

Through the first four months of FY24, total revenues increased by $112 billion compared to the previous year. Collections of individual and corporate income taxes have been much higher in FY24 than through the same period in FY23, driven by deferred payments of individual and corporate income taxes for taxpayers in locations that suffered natural disasters.

National Debt

• Debt Held by the Public at the end of January 2024: $27.0 trillion
• Debt Held by the Public at the end of January 2023: $24.5 trillion

Despite a strong economy, spending has been rapidly outpacing revenue collections. The unsustainable upward trajectory of deficits and debt argues for bipartisan solutions to improve the country’s fiscal outlook, including a fiscal commission.