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Update on the Deficit

Per the Congressional Budget Office (CBO), the official federal deficit for FY23 was nearly $1.7 trillion, an increase from just under $1.4 trillion a year earlier. Excluding the effects of the now-voided student debt relief plan, total federal spending increased to 11 percent in FY23 over last year, or $625 billion, while tax receipts were down by 9 percent, or $455 billion. Spending on the largest federal benefit programs (Social Security, Medicare, and Medicaid) accounted for about 43 percent of the $6.5 trillion in total FY23 outlays, and spending on those three programs grew by 11 percent year over year. Interest payments on U.S. debt rose sharply by 33 percent due to higher interest rates as well as larger debt and are now approaching the $774 billion spent on military outlays in FY23, which rose 7 percent over FY22.