The federal deficit increased to $418 billion in the first quarter of fiscal 2023, the Congressional Budget Office estimated on Tuesday.
The shortfall for the first three months of the fiscal year is $41 billion larger than the deficit run up in the same period in fiscal 2022, meaning that the declining deficit that President Joe Biden has touted now appears to be rising again — and the budget office projected long-term mismatches between spending and revenues that it said threaten the economy and government.
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Revenues, or the amount of money the government raised through taxes, were $26 billion, or 2% lower than during the same period last year, while spending was $15 billion, or 1% higher, than in the first quarter of fiscal 2022.
After the budget was driven up by massive emergency spending during the pandemic from both the Trump and Biden administrations, the deficit has been falling through a pullback in pandemic relief spending and an increase in tax revenues thanks to the economic recovery.
Biden has boasted about the declines in the deficit, using it as a talking point after the CBO announced in October that the federal budget deficit was $1.4 trillion for all of fiscal 2022 — about half of the $2.8 trillion it was in fiscal 2021.
“On my watch, things have been different. The deficit has come down both years that I’ve been in office,” Biden said at the time.
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Following Tuesday’s release of the first quarter numbers, Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said Congress should work to lower the deficit, particularly as inflation is still red-hot.
“In calendar year 2022, we borrowed a total of $1.4 trillion, or $10,808 for every American household, nearly $4 billion per day, and more than we even spent on Social Security, the largest federal program. This is not a pretty picture no matter how you look at it,” she said in a statement.
