The Department of the Treasury and the Office of Management and Budget reported that the deficit rose by $320 billion, or 23 percent, to $1.7 trillion in fiscal year 2023 and that governmental receipts totaled $4.4 trillion, reflecting a drop of 9.3 percent, or $457 billion, from FY 2022.
OMB and the Treasury said Friday the decline in FY 2023 receipts can be attributed to lower individual income tax receipts due to lower capital gains realizations and lower earnings deposits by the Federal Reserve driven by higher interest rates.
Outlays dropped by 2.2 percent or approximately $137 billion to $6.1 trillion due to a Supreme Court decision on certain student loan programs, reductions in COVID-19 relief spending and expiration of the Child Tax Credit.
Federal borrowing from the public totaled $26.2 trillion in FY 2023, an increase of $2 trillion from the previous fiscal year.
The two agencies associated the increase with borrowing needed to finance the deficit and net borrowing related to other transactions.
“The U.S. economy remains resilient despite global headwinds. Previous expectations that the U.S. would fall into recession over the course of 2023 have not borne out. Our economy added over 300,000 new jobs in September and our GDP growth continues to surprise forecasters to the upside, even as inflation has come down significantly since last year,” Treasury Secretary Janet Yellen said.
Under President Biden’s leadership, “inflation is down, job growth remains strong, and unemployment is near record lows—we’ve shown that investing in our nation and achieving meaningful deficit reduction are not mutually exclusive,” said OMB Director Shalanda Young.
