US budget sees 39% debt surge in Q4

The U.S. budget deficit surged to a record $711 billion in the last quarter of 2024, the period of October to December, a 39% increase from $510 billion during the same period last year, according to Treasury Department data released on Tuesday.

In particular, spending rose by 11% to a fresh record, as increasing spending outpaced declining tax revenue while revenues crept down, said the Treasury, an official told reporters, adding that outlays reached $1.8 trillion for three months.

Among categories, spending on Medicare and Medicaid rose, as did spending on defense programs, higher operations, and maintenance costs.

High interest rates widen the debt pit of US budget

Treasury spending also picked up by $33 billion, driven by higher interest on the public debt.

The cost of servicing the country’s debt has risen in recent times on the back of higher interest rates. Among other areas, Homeland Security spending rose too much of it in the wake of hurricanes in late 2024.

The latest budget figures come as President-elect Donald Trump, who is because of take office Monday, has vowed to slash federal spending.