US Budget Deficit Surges 16 Percent to $367 Billion in November

The national debt clock at a bus station in Washington on Nov. 26, 2024. Madalina Vasiliu/The Epoch Times

New Treasury Department data show that the U.S. government registered a larger-than-expected budget shortfall in November, bringing the federal deficit to above half a trillion dollars in the first two months of the fiscal year.

According to the latest Monthly Treasury Statement, the federal government posted a $367 billion monthly deficit last month, up 16 percent from a year ago.

This was slightly higher than the consensus estimate of $353 billion.

Outlays rose 13 percent year over year while revenues increased 9 percent.

The budget deficit is more than $624 billion for the fiscal year to date, up 64 percent from last year, meaning the United States is currently borrowing $10 billion per day.

Medicare ($129 billion), Social Security ($125 billion), and health ($80 billion) were the largest spending items in November.

Net interest costs accounted for the fourth-largest budgetary item, totaling $79 billion.

Cumulatively, net interest charges have totaled $160 billion. Interest on the debt is so vast that it represents more than half of individual income tax collections.

Treasury projects interest payments will exceed $1 trillion in fiscal year 2025.

The Congressional Budget Office (CBO), a nonpartisan budget watchdog, said in its Monthly Budget Review that the shortfall would have been higher if it were not for the shifts in the timing of outlays and revenues and delays in various tax payment deadlines.

On a 12-month rolling basis, the budget deficit is approximately $2.1 billion, says the Committee for a Responsible Federal Budget, an independent policy organization. This is about 7 percent of the GDP.

“These deficit numbers are especially remarkable given that we’re borrowing at this high level without even having a budget in place,” Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said in a statement.

“There will be so many fiscal deadlines and challenges in 2025 that we need to begin developing the muscle memory now for avoiding new borrowing in all its forms, offsetting the cost of new spending and tax cuts and extensions, and meeting these moments with the seriousness they deserve.”

‘I Am Sorry’

In one of her final outgoing interviews, Treasury Secretary Janet Yellen apologized that the current administration could not do more to improve the U.S. government’s fiscal health.

Yellen said during her appearance at The Wall Street Journal’s CEO Council Summit on Dec. 10 that she is worried about fiscal sustainability, adding that the deficit needs to decline.

“I am concerned about fiscal sustainability. And I am sorry that we haven’t made more progress,” Yellen said. “I believe that the deficit needs to be brought down, especially now that we’re in an environment of higher interest rates.”

Yellen has previously dismissed fiscal sustainability concerns, disagreeing with Moody’s downgraded outlook on U.S. debt in November 2023.

“The American economy is fundamentally strong, and Treasury securities remain the world’s preeminent safe and liquid asset,” Yellen said following the announcement.

U.S. Treasury Secretary Janet Yellen attends a press conference at the U.S. ambassador's residence in Beijing on April 8, 2024. Pedro Pardo/AFP via Getty Images

Additionally, Yellen has noted that she pays more attention to net interest costs as a percentage of GDP.

In 2023, it was at a 23-year high of 2.4 percent.

“If the debt is stabilized relative to the size of the economy, we’re in a reasonable place,” Yellen said in an interview with CNBC’s “Squawk Box” in June. “The way I look at it is that we should be looking at the real interest cost of the debt. That’s really what the burden is.”

She also rejected the idea of balancing the budget to create fiscal sustainability.

Others have acknowledged that growing the economy could be the best way out of America’s record debt levels.

“The way out is by outgrowing them,” Amazon founder Jeff Bezos said at The New York Times’ DealBook Summit last week. “We need a growth orientation in this country. This is the most important thing: a growth mindset.”

Scott Bessent, President-elect Donald Trump’s nominee to helm the Treasury Department, told CNBC’s “Squawk Box” that now would be the final chance for the country to grow its way out of its debt problem.

“If you can increase growth, you can change the trajectory,” Bessent said in October.

The incoming administration has proposed a deregulatory strategy to bolster growth prospects. Trump recently vowed to give “fully expedited approvals and permits” to companies or individuals investing at least $1 billion in the United States.

“Get ready to rock,” Trump wrote in a Dec. 11 Truth Social post.

The CBO projects the federal debt held by the public will reach 122 percent of GDP in 2034.

Last month, the national debt topped $36 trillion for the first time, a little more than three months since unlocking the $35 trillion milestone.