The federal government spent $501 billion last month, up $28 billion, to a record high, while tax revenues fell $29 billion from November 2021 to $252 billion.
The deficit narrowed sharply in the previous fiscal year, which ended on September 30, as broad fiscal support during the COVID-19 pandemic ended.
At the same time, rapid economic growth has also helped generate record tax revenues, helping to reduce the deficit.
As the Federal Reserve raises interest rates to address the highest inflation in decades, a slowdown in the economy could also lead to lower tax revenues in the future.
The Fed’s tightening of monetary policy should also create higher borrowing costs for the government.
The Treasury spent 53% more on borrowing costs in November than the same month last year.
With Republicans poised to take control of the House of Representatives next year, the finances of the federal government could once again become a political sticking point.
Some Republicans have signaled they may refuse to raise the nation’s debt limit unless an agreement is reached on large federal budget cuts, which could include Social Security and health care.
Such a debate could bring the United States to the brink of debt default, which has been a feature of the clashes between Republicans and Democrats during the Obama presidency.
