US estimated to have borrowed $127B in January: CBO

The Congressional Budget Office (CBO) estimated in a report on Monday that the federal government racked up a deficit of $127 billion last month.

The CBO estimated the federal budget deficit reached $838 billion in the last four months, which is $306 billion more than the same time frame a year before, as outlays climbed 15 percent.

The agency projected a 6 percent increase in outlays for the nation’s biggest mandatory spending programs in the four-month stretch, with Medicaid outlays rising by $17 billion, “largely because of rising costs per enrollee.”

Spending for Social Security benefits was estimated to have risen by $31 billion during the period, which the agency attributed mostly to cost-of-living adjustments and increases in the number of beneficiaries. Medicare outlays were also projected to have increased by a net $14 billion “largely because of rising costs per enrollee,” the CBO said. 

Other areas that saw big jumps in spending since October include a 43 percent increase in outlays of the Department of Homeland Security, or a $12 billion boost, as the government responded to hurricanes Helene and Milton. The CBO also estimated a 17 percent increase in spending for the Department of Veterans Affairs as “more people used veterans’ benefits and because of increased spending per person.”

The report comes as House Republicans are working to craft a major partisan package to advance key parts of President Trump’s agenda, along with potentially significant cuts to spending and an increase of the debt limit, which caps how much money the Treasury Department can owe to pay the country’s bills.

Congress last agreed to suspend the debt ceiling into January as part of a broader bipartisan agreement to prevent a national default in 2023. 

The Treasury Department began taking so-called extraordinary measures last month so the nation could continue to meet its obligations without breaching the limit. The CBO said Monday that it will later “publish its estimate of how long the government could continue to finance its operations under those measures.”

The national debt stands at more than $36 trillion.