Exterior view of the U.S. Treasury Building in Washington, DC, the United States, on December 30, 2024.
Seral Gunes | Anadolu | Getty Images
In December, the federal budget slid further into the red, resulting in a fiscal first-quarter deficit that was nearly 40% higher than the previous year.
According to a report released by the U.S. Treasury Department on Tuesday, the shortfall in the final month of 2024 totaled $86.7 billion, which was actually down 33% from the same period last year. However, this brought the three-month fiscal total to $710.9 billion, an increase of approximately $200 billion, or 39.4%, from the same period a year earlier.
Rising financing costs, continued spending growth and declining tax revenues have combined to cause the deficit to spiral, pushing the national debt past the $36 trillion mark.
While short-term Treasury yields have been fairly stable over the past month, rates at the far end of the duration curve have surged. The benchmark 10-year Treasury note recently yielded nearly 4.8%, about 0.4 percentage points higher than a month ago.
Meanwhile, first-quarter expenses were 11% higher than the same period last year, while revenue fell 2%.
Total interest on public debt in fiscal 2025 was $308.4 billion, an increase of 7% from the same period last year. Full-year financing costs are expected to reach $1.2 trillion, which would break the 2024 record.
The government is spending more on interest payments this year than any other category except Social Security, defense and health care.
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