U.S. Budget Deficit Rises to $1.8 Trillion in 2024

New estimates from the Congressional Budget Office show continuing fiscal strain, despite steady economic growth.

America’s federal budget deficit rose to $1.8 trillion in the 2024 fiscal year, reaching the highest level in three years, according to new Congressional Budget Office estimates released on Tuesday.

The increase from last year’s $1.7 trillion deficit came as tax revenue failed to keep pace with the rising costs of government programs and the mounting interest on the national debt.

The figures show the continuing fiscal strain facing the U.S. economy, where the national debt is approaching $36 trillion. Despite steady economic growth and low unemployment, annual deficits are growing again after declining from pandemic-era highs. In September, the final month of the fiscal year, the United States recorded a $63 billion surplus, according to C.B.O.

America’s reliance on borrowed money to fund its priorities and pay its bills is not expected to end any time soon. Both Vice President Kamala Harris and former President Donald J. Trump are proposing policies that, if enacted, would cost trillions of additional dollars over the next decade. Much of that spending is expected to be financed with borrowed money.

The Committee for a Responsible Federal Budget, a nonpartisan group that seeks lower deficits, projected in a report this week that Mr. Trump’s various plans could cost as much as $15 trillion over a decade. Ms. Harris’s economic plans could cost as much as $8 trillion.

Ms. Harris has said she will pay for her agenda by raising taxes on wealthy individuals and large companies. Mr. Trump has promised to pay for his by cutting government waste and stimulating stronger economic output.

The fate of those plans will be determined by the makeup of Congress. But regardless of who wins and who controls the Senate and the House, the next president will have to contend with big fiscal decisions about raising the nation’s debt limit, which was suspended until January. The next president will also face a big fight over whether to extend Mr. Trump’s 2017 tax cuts, many of which are expiring next year. Extending all of the expiring provisions would cost as much as $5 trillion over a decade, according to budget estimates.

The official deficit numbers for the fiscal year are expected to be released by the Treasury Department in the coming weeks. The figures have been obscured by accounting quirks in recent years related to a student-loan forgiveness program that President Biden proposed in 2022 that the Supreme Court later struck down. The budget office noted that the federal deficit would have been $110 billion lower in 2024 than it was in 2023 if not for the budgetary effects of that plan being overturned.

The deficit estimates from the budget office are smaller than what it projected earlier this year, but the fiscal situation remains fraught. High interest rates have sent the cost of the government’s payments on borrowed money soaring. Federal spending has also been difficult to corral, in part because the cost of some government programs has exceeded initial expectations.

The Internal Revenue Service has paid out more than $200 billion associated with a pandemic-era benefit known as the employee retention tax credit. That program was originally expected to cost the federal government $55 billion over a decade when it was enacted in 2020. And the Inflation Reduction Act, which was originally protected to cost less than $400 billion over a decade, is now forecast by some economists to cost more than $1 trillion.

The federal government spent $6.8 trillion in 2024, a 10 percent increase from the prior year. A big driver of that was a $240 billion increase in interest costs, which surged 34 percent from last year because of high interest rates. Spending on Social Security and Medicare benefits also increased substantially.

A White House official blamed the tax cuts that Republicans passed in 2017 for inflaming the national debt and noted that Mr. Biden’s most recent budget proposal would reduce the deficit by $3 trillion over a decade. The official also pointed out that the annual deficit is smaller than it was when Mr. Biden took office. The budget deficit peaked at $3.1 trillion in the fiscal year 2020.

“After the last administration increased the debt by a record $8 trillion and didn’t sign a single law to reduce the deficit, Congressional Republicans want to once again blow up the debt with $5 trillion in more Trump tax cuts,” said Jeremy Edwards, a White House spokesman.

Budget analysts and fiscal hawks have been warning with increasing alarm that lawmakers from both parties are not taking the national debt seriously enough and that continued neglect of the problem could lead to automatic cuts to social safety net benefits and slower economic growth.

“As rising interest costs and our structural deficits drive the national debt higher and higher, it’s clear that this is a fiscal election with enormous implications for America’s future,” said Michael Peterson, the chief executive of the Peter G. Peterson Foundation, which promotes fiscal restraint. “The leaders we elect this fall will face a series of critical deadlines, including the return of the debt ceiling, the expiration of trillions in tax cuts and automatic cuts in Social Security growing ever closer.”