(Bloomberg) -- Interest costs continued to drive the US budget deficit wider in February, pushing the federal government's overall gap to $828 billion for the first five months of the fiscal year.
The year-to-date shortfall was 18% larger, after adjustments for calendar differences, than a year ago, according to Treasury Department data released Tuesday. The deficit for February alone was $296 billion.
Interest costs have totaled $433 billion in the fiscal year so far, up an adjusted 41% from a year ago. These costs now make up about a sixth of the government's total budget outlays.
Spending for Social Security and Medicare has risen 9%, and outlays on defense military programs have increased 12%, since the start of the fiscal year in October.
Borrowing costs surged after the Federal Reserve began raising interest rates two years ago to combat inflation. That pushed the weighted average rate on outstanding interest-bearing government debt to 3.2% at the end of February, double the 1.6% seen at the end of January 2022.
In President Joe Biden's proposed budget for fiscal year 2025, the White House predicted net interest payments in 2024 would total about $890 billion, or 3.1% of gross domestic product.
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