The U.S. budget deficit surged to $257 billion in October, nearly quadrupling from the same month last year, according to the Treasury Department’s latest report.
This 287% increase over October 2023’s $67 billion deficit was driven by unique, one-time factors, including adjusted benefit payments and deferred tax payments due to natural disasters. Without these adjustments, the deficit would have been $47 billion, or 22% higher than October 2023.
Federal receipts for October fell by 19% to $327 billion, while outlays rose 24% to $584 billion, reflecting higher spending on Social Security, Medicare, and defense. Although debt service costs decreased by 8% to $82 billion—marking the first year-on-year drop since August 2023—net interest on public debt was still up $4 billion from the previous year.
The report comes as President Joe Biden’s administration concludes fiscal 2024 with a $1.83 trillion deficit, while President-elect Donald Trump faces mounting fiscal challenges. Trump has appointed Elon Musk and Vivek Ramaswamy to lead an independent body aimed at cutting federal spending, with Musk suggesting potential budget cuts of at least $2 trillion, though the timeframe remains unspecified.
Market concerns over Trump’s tax cut plans have already pushed up the 10-year Treasury yield by 15 basis points, further fueling deficit worries.
