Monthly Budget Review: December 2024

The federal budget deficit totaled $710 billion in the first quarter of fiscal year 2025, the CBO estimates. That amount is $200 billion more than the deficit recorded during the same period last fiscal year.

The federal budget deficit totaled $710 billion in the first quarter of fiscal year 2025, the Congressional Budget Office estimates. That amount is $200 billion more than the deficit recorded during the same period last fiscal year. Outlays were $175 billion (or 11 percent) higher, and revenues were $25 billion (or 2 percent) lower.

That change in the deficit was influenced by the timing of outlays and revenues, which decreased the deficit during the first three months of fiscal year 2024 but increased it during the same period this fiscal year. Outlays in October 2023 were reduced by shifts in the timing of payments that were due on October 1, 2023, a Sunday. (The payments were made that September.) Outlays in the first quarter of 2025 rose, on net, because payments due on December 1, 2024, a Sunday, were made in November. (Those increases were partially offset by net reductions in December; a smaller set of payments also shifted into that month because January 1, 2025, was a holiday.) If not for those shifts, the deficit so far this fiscal year would have been $679 billion, or $125 billion more than the shortfall at this point last year. Outlays would have been $100 billion higher. Part of the deficit increase in 2025 also arises from the postponement of some tax deadlines from 2023 to 2024 (described below), which boosted receipts in 2024.

The statutory debt limit was reinstated on January 2, 2025, and set at $36.1 trillion, matching the amount of total debt outstanding on the prior day. In the coming weeks, the Department of the Treasury is expected to announce a "debt issuance suspension period" and to take "extraordinary measures" to borrow additional funds without breaching the debt limit. CBO will publish information in a few weeks on its estimate of how long those measures will remain in place.