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U.S. Deficit, Pegged at $1.7 Trillion, Effectively Doubled in 2023 [1]

['Alan Rappeport', 'Jim Tankersley', 'More About Alan Rappeport', 'More About Jim Tankersley']

Date: 2023-10-20

America’s federal budget deficit effectively doubled in the 2023 fiscal year as slumping tax receipts, rising interest rates and persistent demand for expiring pandemic relief benefits strained the nation’s finances.

The latest Treasury Department figures showed a budget deficit of $1.7 trillion in 2023, up from $1.37 trillion in 2022. Those numbers make the deficit look smaller than it actually was last year, because of an accounting mirage related to a student-loan forgiveness program that President Biden proposed last year.

That program was struck down by the Supreme Court this summer and never took effect. But the Treasury recorded it as a cost in 2022, which inflated that year’s deficit. After the court killed the program, the Treasury recorded it as savings, which artificially reduced this year’s deficit.

Those student loan effects changed the deficit figures for both 2022 and 2023. When factoring them out, the deficit jumped to $2 trillion in 2023 from about $1 trillion in 2022, administration officials confirmed in a call with reporters on Friday.

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[1] Url: https://www.nytimes.com/2023/10/20/business/treasury-report-shows-1-7-trillion-deficit.html

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