US Federal Budget Deficit Doubles to $1.7 Trillion; Debt Interest Payments Spike to $659 Billion

Rising Deficits and Federal Reserve Rate Hikes Contribute to Nearly Doubling Interest Payments, Straining Government Finances Amid Debate over Funding Levels and Spending Cuts.

The US federal budget deficit doubled to $1.7 trillion in 2023, largely due to slumping tax receipts, rising interest rates, and persistent demand for expiring pandemic relief benefits.
Interest payments on the national debt have spiked to $659 billion, nearly double from two years ago, primarily due to rising federal borrowing costs amid Federal Reserve rate hikes.
In the face of rising deficits, Republicans have begun insisting on deep budget cuts to reduce the federal deficit, while the Biden administration is focusing on tax increases for high earners and corporations to combat the deficit.
The Congressional Budget Office projects that within three years, if interest rates remain high, payments on the debt could become the second-largest federal expenditure, only behind Social Security.
Budget experts warn that if the current trajectory of deficits and debt continues without significant counteractions in the form of spending cuts or tax increases, the U.S. long-term fiscal health might be at significant risk.