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Federal Deficit and Debt: September 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 September 2024, the final month of fiscal year (FY) 2024.
- Federal Budget Surplus for September 2024: $64 billion
- Federal Budget Deficit for September 2023: $171 billion
The federal government realized a surplus of $64 billion in September 2024, a change of $235 billion from the deficit of $171 billion recorded in September 2023. The totals for both Septembers were affected by shifts in the timing of payments. Because September 1, 2024, fell on a weekend, payments for certain programs were shifted into August. Additionally, outlays in September 2023 were higher than they otherwise would have been because October 1, 2023, fell on a weekend and certain payments were made earlier. Adjusting for those two effects, the government incurred a deficit of $16 billion in September 2024, $82 billion less than the same month in the previous year.
Spending in September 2024 was $463 billion, $175 billion less than in September last year, although the large difference is mainly attributable to the timing shifts. Controlling for those adjustments, outlays were down by $23 billion compared to September 2023. The largest decrease in outlays was associated with the Federal Deposit Insurance Corporation (FDIC), which recorded outlays of $47 billion last September related to the failure of First Republic Bank but recorded a surplus of $5 billion in September 2024. Partially offsetting those decreases were increases in outlays related to Medicaid ($10 billion), net interest ($9 billion), and Social Security ($8 billion). Revenues in September 2024 were $60 billion above collections from a year ago, mainly due to increased collections of individual income and payroll taxes ($41 billion) and corporate income taxes ($13 billion).
Cumulative Federal Deficit
- Cumulative FY24 Deficit: $1.8 trillion
- Cumulative FY23 Deficit: $1.7 trillion
The cumulative deficit in 2024 was $138 billion above the amount reported for 2023. However, the total deficit in 2023 was $330 billion lower due to an adjustment related to student loan cancellation. Additionally, because October 1 fell on a weekend in both 2022 and 2023, certain federal payments were shifted into the previous fiscal year for both FY23 and FY24. Without those effects, the deficit for FY24 would have been $111 billion below the deficit in the previous year.
For FY24, total outlays were $6.8 trillion, $617 billion higher than the same period in the previous year. Adjusting for the aforementioned shifts, spending was $368 billion above the same period in 2023. Four areas of the budget experienced large increases in 2024:
- Net interest grew by $222 billion (34 percent), primarily due to higher interest rates and greater amounts of borrowing.
- Spending for Social Security benefits rose by $107 billion (8 percent) because of cost-of-living adjustments and an increased number of beneficiaries.
- Spending on Medicare increased by $79 billion (9 percent) because of enrollment increases and growing payment rates for services.
- Defense spending rose by $53 billion (6 percent) in FY24.
- Debt Held by the Public at the end of FY24: $28.2 trillion
- Debt Held by the Public at the end of FY23: $26.2 trillion
Partially offsetting those increases was a $55 billion decrease in outlays by the FDIC and a $51 billion decrease in outlays from tax credits related to the government's response to the COVID-19 pandemic. Other categories of outlays that decreased include spending by the Pension Benefit Guaranty Corporation because certain one-time payments were made to pension plans in FY23 but not in FY24 ($28 billion) and spending related to the Supplemental Nutrition Assistance Program ($28 billion).
Total revenues increased by $479 billion in FY24 compared to the previous year. The main drivers were a significant increase in collections of individual income ($250 billion more than in FY23), corporate income ($110 billion), and payroll taxes ($95 billion). Such revenues were higher in FY24 than in FY23, in part because the IRS allowed certain locations that suffered natural disasters to defer payments until into FY24. In addition, higher wages and salaries boosted individual and payroll tax collections, and the moratorium on the Employee Retention Tax Credit significantly reduced individual income tax refunds.
National Debt
Despite a healthy economy over the past fiscal year, spending rapidly outpaced revenue collections. The unsustainable upward trajectory of deficits and debt argues for bipartisan solutions to improve the country’s fiscal outlook. The Peterson Foundation’s recent Solutions Initiative provides a compendium of approaches to improve that outlook.