The federal deficit was $1.8 trillion in the 2024 fiscal year that ended Sept. 30, according to the latest estimate from the Congressional Budget Office released Tuesday.

The nonpartisan federal agency said the 2024 deficit was $139 billion more than in 2023, despite increases in federal revenue.

What You Need To Know

  • The federal deficit was $1.8 trillion in the 2024 fiscal year that ended Sept. 30, according to the latest estimate from the Congressional Budget Office released Tuesday

  • The nonpartisan federal agency said the 2024 deficit was $139 billion more than in 2023

  • The CBO found that revenues increased $479 billion, or 11%, for the year, largely driven by increases in individual income taxes

  • Outlays, however, rose by an estimated $617 billion, or 10%, primarily for education and paying interest on public debt

The CBO found that revenues increased $479 billion, or 11%, for the year, largely driven by increases in individual income taxes. Outlays, however, rose by an estimated $617 billion, or 10%, primarily for education and paying interest on public debt.

The latest estimate comes one day after the nonpartisan Committee for a Responsible Federal Budget said the economic plans of both presidential candidates could add to the federal deficit, with former President Donald Trump’s plan doubling the federal shortfall compared with Vice President Kamala Harris. The analysis estimates Trump’s policies will increase the deficit by $7.5 trillion while Harris’ would grow it by $3.5 trillion.

As the federal deficit grows, so does the risk of slower economic growth, weakened national security and a fiscal crisis, according to the Committee’s report.

The national debt is currently 99% of the Gross Domestic Product. It is expected to grow to 102% of GDP by the beginning of 2026. 

Earlier this year, the CBO said it expects the federal deficit to grow 63% over the next ten years — to $2.6 trillion in 2034. By then, the group said the level of debt held by the public relative to the nation’s Gross Domestic Product will reach 116% — the highest level in the country’s history.

The increase in debt over the coming decade will largely be driven by mandatory spending and interest costs. If the current trend continues, the CBO said the federal debt will climb to 172% of GDP by 2054. 

Federal outlays from 2024 through 2028 are expected to be $6.5 trillion annually but will increase after that as the government spends more on mandatory programs for elderly Americans and pays more in interest costs.

Revenues are expected to hold steady at about $4.9 trillion annually through 2034. The majority of revenue will derive from individual income taxes, followed by payroll taxes and corporate income taxes.