Federal Deficit and Debt: June 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 June 2024, the ninth month of fiscal year (FY) 2024.

Current Federal Deficit

• Federal Budget Deficit for June 2024: $66 billion
• Federal Budget Deficit for June 2023: $228 billion

The federal government ran a deficit of $66 billion in June 2024 – $162 billion less than the deficit of $228 billion that was recorded in June 2023. It is important to note that certain payments were shifted into May 2024 because June 1, 2024 fell on a weekend, artificially reducing this month's reported spending. Furthermore, reported outlays in June 2023 were inflated because July 1, 2023, fell on a weekend, shifting payments into June 2023. Adjusting for the effects of both timing shifts, the June 2024 deficit was $18 billion more than the same month last year.

Spending in June 2024 was $532 billion, $114 billion less than in June last year, although that decrease is entirely attributable to the effects of the timing shifts. Adjusting for those effects, outlays were up $65 billion compared to June 2023. The primary driver was a $60 billion increase in spending by the Department of Education due to a higher adjustment to the cost of outstanding loans relative to last year’s calculation. Net interest outlays also increased by $11 billion because of higher interest rates. Those and other increases in spending were partially offset by an $11 billion decrease in outlays related to national defense. Revenues in June 2024 were $48 billion above collections from a year ago, mainly due to increased collections of individual income and payroll taxes ($37 billion more than June 2023) and corporate income taxes ($10 billion).

Cumulative Federal Deficit

• Cumulative FY24 Deficit: $1.3 trillion
• Cumulative FY23 Deficit (through June 2023): $1.4 trillion

This year’s cumulative deficit is $125 billion below 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. Additionally, July 1, 2023, fell on the weekend, causing certain payments to be shifted into the first nine months of FY23 and boosting last year’s deficit over the same period. Without those effects, the deficit for FY24 through the end of June would be $29 billion below last year’s corresponding total.

For the first nine months of FY24, total outlays were $5.0 trillion, $217 billion higher than the same period in the previous year. Adjusting for timing shifts, spending was $312 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 $188 billion (38 percent) relative to the first nine months of last fiscal year, mostly due to higher interest rates; spending for Social Security benefits has risen by $83 billion (8 percent) because of cost-of-living adjustments and an increased number of beneficiaries. In addition, spending on Medicare, defense, and Education increased significantly in the first nine months of this fiscal year. Partially offsetting those increases was a $47 billion decrease in outlays from tax credits related to the government's response to the COVID-19 pandemic. Other categories of outlays that decreased were the Pension Benefit Guaranty Corporation because certain one-time payments were made to pension plans in FY23 but not in FY24 ($38 billion) and the Food and Nutrition Service ($25 billion).

Total revenues increased by $342 billion in the first nine months of FY24 compared to the previous year, largely 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 ($192 billion more than the same period in FY23), corporate income ($87 billion), and payroll taxes ($65 billion). Collections of individual, payroll, and corporate taxes have been much higher in FY24 than through the same period in FY23, in part 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 June 2024: $27.5 trillion
• Debt Held by the Public at the end of June 2023: $25.4 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.