A view from the US Treasury building in Washington, D.C., United States on December 30, 2024. The US Treasury Department was attacked by a Chinese state-sponsored actor in early December.
Jalal Jones | Anatolia | Getty Images
The federal budget sank further into red ink during December, leaving the fiscal first quarter deficit nearly 40% higher than it was a year earlier.
For the final calendar month of 2024, the deficit totaled $86.7 billion, actually representing a 33% decline from the same period a year earlier, according to a Treasury Department report on Tuesday. However, the three-month fiscal year total came to $710.9 billion, about $200 billion more than the corresponding period a year earlier, or 39.4%.
Rising financing costs combined with continued spending growth and declining tax revenues have led to spiraling deficits, pushing the national debt past $36 trillion.
Although short-term Treasury yields have remained fairly steady over the past month, interest rates at the far end of the duration curve have risen. Benchmark 10-year bonds recently yielded nearly 4.8%, or about 0.4 percentage point higher than a month ago.
Meanwhile, expenses during the first quarter were 11% higher than a year ago, while revenues were down 2%.
Total interest on the national debt reached $308.4 billion in fiscal year 2025, an increase of 7% over last year. Financing costs are expected to exceed $1.2 trillion for the full year, which will exceed the record number of 2024.
The government spent more this year on interest payments than on any other category except Social Security, defense and health care.
