The federal government’s deficit is soaring to historic levels under President Joe Biden, with new data showing Washington has racked up $622 billion in red ink just two months into the fiscal year.
Monday’s Congressional Budget Office report reveals a 40% surge in deficit spending compared to 2023, driven by a November shortfall of $365 billion. Even accounting for technical adjustments in payment timing, the CBO’s analysis shows the deficit running $88 billion ahead of last year’s pace.
Gone are the days when trillion-dollar deficits were unthinkable, never topping $1 trillion before the Covid-19 pandemic struck. Now, with last year’s deficit hitting $1.8 trillion under Biden’s watch, they’re becoming the new normal.
Making matters worse, the Fed’s inflation-fighting rate hikes have sent borrowing costs through the roof. For the first time ever, Washington’s annual interest payments topped $1 trillion. Even after counting returns on government investments, taxpayers are still on the hook for $882 billion in interest costs.
With the national debt now approaching $36 trillion, newly appointed Trump advisor Elon Musk is warning that failure to address the deficit threatens critical programs including defense, Medicare, and Social Security.
“If we don’t fix the deficit, everything will suffer,” Musk wrote on X. “It’s not optional.”
Musk, alongside fellow billionaire Vivek Ramaswamy, has been tasked by the President-elect with addressing the country’s surging debt. On November 12, Donald Trump announced that the two would serve as co-heads of the Department of Government Efficiency (DOGE), a newly created entity focused on reducing government expenditures, slashing regulations, and enacting cost-cutting initiatives throughout the federal government.
Last month, Musk promised to cut “at least $2 trillion” from US government spending. However, budget experts say that even if the tech billionaire shut down complete federal departments such as homeland security, transportation, agriculture, and others, it still wouldn’t reach his target.
