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The U.S. budget deficit exponentially increased and reached around $257 billion in October, primarily due to one-off factors.
According to a report by the Treasury Department released on Wednesday, the figure was a sharp increase of 287% from October 2023's $67 billion deficit. In October 2023, the deficit was cut nearly in half due to the calendar adjustments made in benefit payments. Last October, the Treasury received tax payments of approximately $75 billion that had been deferred by wildfires in California and other disasters.
That pushed revenue much higher than normal. Treasury officials noted that the $47 billion deficit for October 2024 would only be 22% higher than the previous year, Reuters reported. The October period marks the first month of the 2025 fiscal year.
The full fiscal year 2024 had a $1.83 trillion deficit, which was the largest outside of the COVID-19 pandemic. Federal receipts for October 2024 slid 19% year-over-year to $327 billion.
Outlays increased by 24% to $584 billion. Social Security, Medicare and military spending outlays increased, save for the 8% decline in the public debt service costs of the Treasury. Since August 2023, this was considered as the first year-on-year decline.
In the fiscal year of 2020, President-elect Donald Trump presided over a $3.1 trillion U.S.
budget deficit, which was considered as the largest ever but was blamed on spending at the height of the COVID-19 pandemic. Along with the spending, the pause in economic activity has affected federal revenues. On Tuesday, Trump named billionaire Elon Musk to head a newly formed non-government body called the Department of Government Efficiency (D.
O.G.E) alongside former presidential candidate Vivek Ramaswamy.
The new department aims to slash government spending and reduce bureaucracy. Musk previously claimed he would be able to cut $2 trillion from the budget. He didn't hint at how or when he could be able to accomplish that.
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