K-12 Tax & Spending Climate: Here Comes the $2 Trillion Deficit
CBO’s update for August, out Tuesday, says revenues in the first 11 months of fiscal 2024 were running 11% above a year ago. Total receipts were $4.4 trillion, including $2.2 trillion in individual income taxes (up 11%), $1.6 trillion in payroll taxes (up 6%), and $420 billion in corporate income taxes (up 29%). That kind of growth should push the budget toward balance.
Yet outlays so far this year were $6.3 trillion, up 7% once CBO excludes the Education Department’s “2023 savings” after President Biden’s student-loan forgiveness lost in court. Social Security benefits were $1.3 trillion, up 8% with cost-of-living adjustments and new enrollees. Medicare was $847 billion, up 10% after new beneficiaries and higher service costs.
Net interest on the public debt was $870 billion, up 35% thanks to higher borrowing rates. That exceeded military spending of $753 billion. Pentagon spending was up 7%, nowhere near enough to match the rising global threats facing the U.S.
The end of Covid paid fiscal dividends. Medicaid spending of $561 billion was down 1%, as those who no longer qualify were disenrolled. Other savings included $51 billion “attributable in part to the IRS’s moratorium on processing claims for the Employee Retention Tax Credit,” as well as $24 billion in decreased food assistance.
