The US budget deficit expanded sharply in November, casting a worrisome pattern for fiscal 2025. According to Treasury Department releases, the deficit for that month totals $366.8 billion, which had been recorded at 17% advanced in November 2023. That also increased the deficit registered during the first two months of fiscal 2025 by an amount that was 64% more than it had in the same period last year.
While receipts were up to $301.8 billion, about $27 billion more than November 2023, outlays continued to climb. November outlays totaled $668.5 billion, nearly $80 billion higher than a year ago. The expanding deficit also pushed the national debt, which had reached $36.1 trillion by month’s end.
On an adjusted basis, the deficit for November is $286 billion, raising the year-to-date to $544 billion, that is 19 percent over the same period last year of fiscal 2024. This rising deficit came despite the two interest rate cuts by the Federal Reserve since September, or a total of 0.75 percentage points of cuts. Yet interest payments are driving the growing deficit. Net interest expenses in November were $79 billion, putting the fiscal year total at $160 billion. It only ranks second among other of the major spending in areas like Social Security, Medicare, defense, and health care.
The total interest on the national debt is slated to grow to $1.2 trillion in the fiscal year, the Treasury Department reports. The budget deficit and the national debt increase, revealing that the long-term problem with the budget and the way increasing cost of rising interest devours government funds remains. The widening of the deficit at a fast pace is likely to generate concerns regarding the sustainability of U.S. fiscal policy since it poses difficult choices on management of government spending and debt obligations going forward.