The federal budget deficit has increased to $1.16 trillion for the first eight months of fiscal year (FY) 2023, Bloomberg reports.
FY2023 began in October 2022. The federal budget deficit increased to $240 billion during the month of May, Bloomberg reported Monday, hitting a total of $1.16 trillion thus far in FY2023. The nation’s cumulative deficit across the first eight months of FY2023 is “up from $426 billion a year earlier,” according to Reuters, and marks a 191% increase from May 2022.
The Treasury has attributed the increased deficit primarily to rising interest costs, but rising rates of Medicare and Medicaid, as well as “federal depositor insurance costs related to the failure of a small number of regional banks” are also driving factors, according to Bloomberg. (RELATED: Democrats Move To Hamstring Congress’ Power Over The Debt Limit: REPORT)
The US federal government’s budget deficit hit $1.16 trillion for the first eight months of the fiscal year, a 191% increase from a year ago https://t.co/LCREOrKImx
— Bloomberg (@business) June 12, 2023
President Joe Biden on June 3 signed “legislation suspending the $31.4 trillion cap on U.S. debt until January 2025,” Reuters reports. Since then, the Treasury has planned to significantly raise its cash reserves, which dropped to less than $23 billion earlier in June. The Treasury has set a target of $550 billion in accessible funds by the end of June, Bloomberg reported in a separate article, but the replenishing process could amount to over $1 trillion in new securities and incur unwanted consequences by draining liquidity from the banking sector.