Deficit of $82 Billion in December 2022

The federal government incurred a deficit of $82 billion in December 2022, CBO estimates—$61 billion more than the shortfall in December 2021.  Revenues were lower in December 2022 than they were a year before, and outlays were higher.  Net outlays for interest on the public debt increased by $45 billion (or 44 percent), mainly because interest rates are significantly higher than they were in the first quarter of fiscal year 2022.  Fiscal YTD net interest is $149 billion. (Note that net interest accounted for more than half of the deficit).

Remittances from the Federal Reserve decreased from $26 billion to less than $1 billion. Higher short-term interest rates raised the central bank’s interest expenses above its income, eliminating the profits of most Federal Reserve banks.

The federal budget deficit was $418 billion in the first quarter of fiscal year 2023, the Congressional Budget Office estimates—$41 billion more than the shortfall recorded during the same period last year.