Rising US financing costs push interest payments to US$308bn, second only to Social Security spending
The US federal budget deficit for the first fiscal quarter of 2025 increased nearly 40 percent compared to the same period in the prior year, according to a report from the Treasury Department.
CNBC reports that the deficit for December 2024 totalled US$86.7bn, representing a 33 percent decline from December 2023.
However, the three-month total reached US$710.9bn, approximately US$200bn higher than the previous year’s figure of US$510.9bn.
The US Treasury Department attributes the widening deficit to rising financing costs, increased government spending, and declining tax receipts.
The growing deficit has pushed the national debt past US$36tn, reflecting the ongoing financial strain on the federal budget.
Interest payments on the national debt reached US$308.4bn in the first quarter, marking a 7 percent increase from the same period last year.
Projections suggest financing costs will exceed US$1.2tn for the full fiscal year, surpassing the record set in 2024.
This year, the US government has allocated more to interest payments than any category except Social Security, defence, and health care.
Spending during the first quarter was 11 percent higher than the prior year, while tax receipts declined by 2 percent.
Short-term Treasury yields remained relatively stable over the past month, but the 10-year Treasury note yield rose to 4.8 percent, 0.4 percentage points higher than its level a month ago.
