View from the U.S. Treasury building in Washington, United States, December 30, 2024. In early December, the U.S. Treasury was attacked by a cyberattack by a Chinese state-sponsored actor.
Celal Gunes | Anadolu | Getty Images
The federal budget sank even further in December, leaving the fiscal first-quarter deficit nearly 40% higher than the previous year.
The shortfall was $86.7 billion in the final calendar month of 2024, according to Tuesday's report from the Treasury Department, which is actually down 33% from the same period a year earlier. However, this brought the three-month fiscal year total to $710.9 billion, an increase of approximately $200 billion over the comparable period last year, or 39.4%.
Rising financing costs, combined with continued spending growth and declining tax revenues, have caused the deficit to spiral, pushing the national debt above $36 trillion.
While short-term Treasury yields have remained fairly stable over the past month, rates at the other end of the duration curve have risen. The yield on the benchmark 10-year bond was recently near 4.8%, about 0.4 percentage point above its level a month ago.
At the same time, expenditure in the first quarter was 11% higher than a year ago, and revenues decreased by 2%.
Interest on the national debt was $308.4 billion in fiscal year 2025, up 7% from last year. Financing costs are projected to reach $1.2 trillion for the full year, which would be a record for 2024.
This year, the government spent more on interest payments than on any other category except Social Security, defense and health care.