U.S. Budget Deficit Soars: Key Factors and New Fiscal Policies

The U.S. budget deficit surged to $257 billion in October, partly due to one-off factors. Adjusted for calendar variabilities, it would stand at about $47 billion. Federal receipts dropped by 19% while outlays increased by 24%. Steps to cut federal spending have been proposed.

The U.S. budget deficit surged drastically in October to $257 billion, nearly four times the previous year's figure. This significant increase was influenced by unique factors, according to the Treasury Department's report, marking the beginning of the new fiscal year with considerable financial challenges.

In October 2023, deferred taxes due to California wildfires and other natural events contributed about $75 billion to Treasury receipts. Without these adjustments, October 2024's deficit would have been around $47 billion, representing a 22% increase from the year before.

President Joe Biden's administration ended fiscal 2024 with a $1.83 trillion deficit, whereas former President Trump's largest deficit stood at $3.1 trillion amidst COVID relief efforts. Meanwhile, federal spending cuts are being discussed by figures like Elon Musk in newly formed advisory bodies.

(With inputs from agencies.)