U.S. Budget Deficit Hit $1.1 Trillion in Fiscal Year's First Half

There was a 63% jump in the US federal government's budget deficit in the first half of the fiscal year, driven primarily by higher expenditures on education, healthcare benefits, and debt interest payments, translating to a deficit of $1.1 trillion in the first half of the fiscal year 2018.

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In March, the federal government had a deficit of $378 billion, according to monthly budget figures released Wednesday by the Treasury Department. A calendar adjustment has been applied to year-over-year comparisons to compensate for differences in the calendar year.

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There was an increase of 32% in interest payments on outstanding debt over the first six months of fiscal 2023, as the first six months of fiscal 2023 saw an increase of $384 billion in interest payments. The government has been forced to pay higher returns to purchasers of US Treasury securities as a result of the Federal Reserve raising its benchmark interest rates to combat inflation, forcing the government to eat into the government budget.

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Furthermore, there was a rise in the amount spent by the Department of Health and Human Services to $843 billion in the first half, a jump of 5%, largely due to an increase in Medicare and Medicaid costs.

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In the first half of the year, outlays of the Department of Education increased by 76% and amounted to $124 billion, including costs associated with the administration's loan forgiveness program, a Treasury official told reporters on a conference call.

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Payments made by the Federal Deposit Insurance Corporation to cover depositors at the failed Silicon Valley Bank and Signature Bank increased the outlays by $29 billion in March, according to a government official. There are however previous receipts which originate from fees that member banks of the FDIC have paid in order to cover that expense.