Federal Deficit and Debt: May 2024

Every month the U.S. Treasury releases data on the federal budget, including the current deficit or surplus. The following contains budget data for May 2024, the eighth month of fiscal year (FY) 2024.

Current Federal Deficit

• Federal Budget Deficit for May 2024: $347 billion
• Federal Budget Deficit for May 2023: $240 billion

The federal government ran a deficit of $347 billion in May 2024 – $107 billion more than the deficit of $240 billion that was recorded in May 2023. It is important to note that certain payments were shifted into May 2024 because June 1, 2024 fell on a weekend. Adjusting for the effects of that timing shift, the May 2024 deficit was $13 billion more than the same month last year.

Spending in May 2024 was $671 billion, $123 billion more than in May last year, although much of that increase can be attributed to the timing shift. Adjusting for that timing effect, outlays were up $29 billion compared to May 2023. The primary driver was a $33 billion increase in the estimated cost of disaster loans provided by the Small Business Administration. Net interest outlays also increased by $29 billion because of higher interest rates. Those and other increases in spending were partially offset by a $12 billion decrease in outlays for the Federal Deposit Insurance Corporation, which saw an increase in spending in May 2023 as the agency addressed two major bank failures. Revenues in May 2024 were $16 billion above collections from a year ago, mainly due to increased collections of corporate income taxes ($16 billion more than May 2023).

Cumulative Federal Deficit

• Cumulative FY24 Deficit: $1.2 trillion
• Cumulative FY23 Deficit (through May 2023): $1.2 trillion

This year’s cumulative deficit is $37 billion above last year’s level. However, because October 1 fell on a weekend in both calendar years 2022 and 2023, certain federal payments were shifted into the previous fiscal year in both FY23 and FY24. Without those effects, and the timing shift in May 2024, the deficit for FY24 through the end of May would be $47 billion below last year’s corresponding total.

For the first eight months of FY24, total outlays were $4.5 trillion, $331 billion higher than the same period in the previous year. Adjusting for timing shifts, spending was $247 billion above the same period last year. Two areas of the budget have experienced rapid increases so far this year. Net interest has grown by $177 billion (42 percent) relative to the first eight months of last fiscal year, mostly due to higher interest rates; spending for Social Security benefits has risen by $75 billion (8 percent) because of cost-of-living adjustments and an increased number of beneficiaries. In addition, spending on Medicare, defense, and Veterans Affairs increased significantly in the first eight months of this fiscal year. Partially offsetting those increases was a $38 billion decrease in spending by the Pension Benefit Guaranty Corporation because certain one-time payments were made to pension plans in FY23 but not in FY24. Other categories of outlays that decreased were related to the government’s response to the COVID-19 pandemic ($39 billion), the Department of Education ($30 billion), and the Food and Nutrition Service ($24 billion).

Total revenues increased by $294 billion in the first eight months of FY24 compared to the previous year, in large part because of payments of deferred taxes and an increase in wages and salaries. The main driver was a significant increase in collections of individual income ($156 billion more than the same period in FY23), corporate income ($77 billion), and payroll taxes ($64 billion). Collections of individual, payroll, and corporate taxes have been much higher in FY24 than through the same period in FY23 because the IRS allowed certain locations that suffered natural disasters to defer payments until this fiscal year.

National Debt

• Debt Held by the Public at the end of May 2024: $27.5 trillion
• Debt Held by the Public at the end of May 2023: $24.6 trillion

Despite a healthy economy, spending has been rapidly outpacing revenue collection. The unsustainable upward trajectory of deficits and debt argues for bipartisan solutions to improve the country’s fiscal outlook.