Deficit Tops $500 Billion in First 4 Months of Fiscal 2024

Deficit Tops $500 Billion in First 4 Months of Fiscal 2024

The Senate is slowly moving toward passing the foreign aid bill.
Sipa USA
By Yuval Rosenberg and Michael Rainey
Monday, February 12, 2024

Happy Monday! We get another key reading on inflation tomorrow morning — and Wednesday is Valentine’s Day, but we’ll accept your feedback and fan mail anytime.

Here’s your fiscal update.

Senate Inches Toward Passing Ukraine Aid Bill Despite Trump Opposition

The Senate remains on track to pass a $95.3 billion foreign aid package this week after 18 Republicans joined with Democrats to advance the bill in a 67-27 vote on Sunday afternoon.

Among its provisions, the bill would deliver $60 billion in assistance for Ukraine, $14.1 billion for Israel and $9.2 billion for humanitarian assistance for civilians in Gaza, the West Bank and Ukraine.

The progress comes despite opposition from former president and current GOP presidential frontrunner Donald Trump, who said over the weekend that any foreign aid should be structured as a loan and that the United States should stop giving money to other countries “without the hope of a payback” and without strings attached.

“One more GOP senator voted ‘yes’ on Sunday’s procedural vote than Thursday’s procedural vote on the bill,” CNN noted, calling it “a sign that GOP support for the measure has remained consistent and even expanded in recent days, despite Trump’s lobbying effort against US foreign aid and a previous package that included border policy changes and funding.”

The legislation still faces additional votes in the Senate, including two more procedural hurdles tonight and then 60 more hours of debate. Republican Sen. Rand Paul of Kentucky, who opposes the spending on foreign aid, has warned about adding to the national debt and vowed to slow the bill’s progress as much as possible, meaning that final passage isn’t likely before Wednesday.

“Talking filibuster begins in earnest this afternoon!” Paul said on social media on Monday, one day after insisting he would hold out until “hell freezes over.”

If or when the package clears the Senate, it faces an uncertain future in the House, where Speaker Mike Johnson may be unwilling to bring it to a vote given the stiff opposition of many of his Republican members to providing more funding for Ukraine.

Supporters of the bill have reportedly had discussions about using a legislative tool called a discharge petition to force a House floor vote on the legislation. A majority of House members would have to sign the petition to force Johnson’s hand, meaning that some Republican help would be required. For more on the possible paths forward in the House, see here.

Deficit Tops $500 Billion in First 4 Months of 2024 Fiscal Year

The federal budget deficit was a bit smaller in January than it was a year ago, as outlays exceeded revenues by a relatively modest $22 billion, compared to $38 billion in 2023, according to the latest Treasury Department data released Monday.

Nevertheless, the deficit continues to grow rapidly on a cumulative basis, totaling $532 billion in the first four months of the 2024 fiscal year, which began in October. The four-month total this year is 16% higher than the total for the same period a year ago.

Rising interest costs are playing a central role in the accelerating growth of the deficit. The Treasury paid $357 billion in interest between October 2023 and January 2024, a 37% increase from the interest paid during the same period last year.

As Bloomberg’s Viktoria Dendrinou notes, the aggressive interest rate hikes rolled out by the Federal Reserve as part of its effort to control inflation have made debt more expensive. “The weighted average interest rate on outstanding US interest-bearing government debt was 3.15% at the end of January – the highest since May 2010 and marking a roughly 70 basis point increase from a year before,” Dendrinou writes.


Number of the Day: $600 Million

Amazon founder and sometime world’s richest man Jeff Bezos could save upwards of $600 million on a planned sale of stock thanks to his recent move to Miami, Florida. CNBC’s Robert Frank reports that Bezos plans to sell 50 million shares in Amazon over the next year, and as a Florida resident he will avoid paying the 7% tax on large stock sales recently imposed in Washington state, his former residence. The tax went into effect in 2022, and according to Frank, at that point, Bezos stopped his routine selling of Amazon stock. Florida does not tax income or capital gains, and as a result, Bezos will avoid paying hundreds of millions of dollars in taxes on stock sales that could top $8 billion this year alone.

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