The fiscal year 2024 federal budget covered October 1, 2023 through September 30, 2024, operated under discretionary spending caps of roughly $886 billion for defense and $704 billion for nondefense set by the Fiscal Responsibility Act of 2023, and closed with a deficit of $1.833 trillion.1U.S. Treasury Fiscal Data. National Deficit Congress did not finish its appropriations bills on time and kept the government open with a two-track continuing resolution before final full-year funding was enacted.
Why the Year Ran October to September
The federal financial year does not track the calendar. It begins October 1 and ends the following September 30, so “fiscal year 2024” started in October 2023. The October start gives Congress time after its January session begins to negotiate spending bills before the money actually needs to flow. A January-to-December cycle would leave a new Congress or incoming administration almost no runway to shape spending before it took effect.
September 30 is also the hard deadline for agencies to close their books. Every department must reconcile accounts, finalize obligations, and report unspent balances by that date. Treasury then uses those figures to calculate the final deficit or surplus and prepare the government’s audited financial statements.
The Spending Caps Set by the Fiscal Responsibility Act
The Fiscal Responsibility Act of 2023 (Public Law 118-5) was passed primarily to resolve a debt ceiling standoff, and it placed hard limits on how much Congress could appropriate for the year.2Congress.gov. Public Law 118-5 – Fiscal Responsibility Act of 2023 It also suspended the statutory debt limit through January 1, 2025, giving Treasury borrowing room while the spending fight played out.
The law wrote specific dollar figures into the Balanced Budget and Emergency Deficit Control Act of 1985, creating enforceable ceilings on FY2024 discretionary spending. The revised security category, essentially defense, was capped at $886,349,000,000 in new budget authority. The revised nonsecurity category, covering domestic programs, was capped at $703,651,000,000.3Office of the Law Revision Counsel. 2 USC 901 – Enforcing Discretionary Spending Limits
The defense figure covered military personnel, equipment procurement, national security research, and the operation of installations worldwide. The nondefense side funded public health programs, environmental enforcement, federal courts, educational grants, and much more. Around $704 billion sounds large, but it had to stretch across dozens of agencies and thousands of programs, and the caps left little room to increase funding in one area without cutting somewhere else.
How the Government Stayed Open: The Laddered Continuing Resolution
Congress did not finish the 12 regular appropriations bills before October 1, 2023, so it needed a temporary fix to keep the government open. That tool is a continuing resolution, a short-term law extending the previous year’s spending levels for a set period. Continuing resolutions are common; the version used for FY2024 was not.
Lawmakers passed what became known as a “laddered” continuing resolution, splitting agencies into two groups with different expiration dates.4Congress.gov. H.R.6363 – 118th Congress (2023-2024): Further Continuing Appropriations and Other Extensions Act, 2024 One set of agencies faced a funding deadline in January 2024. The rest were funded into March. Staggering the deadlines was meant to break the all-or-nothing dynamic of a single expiration and give Congress multiple chances to finish full-year bills without risking a total shutdown each time.
Continuing resolutions carry real costs. They typically bar agencies from starting new programs, entering into new contracts for projects not already underway, or accelerating production timelines at the Department of Defense.5United States Senate Committee on Appropriations. Continuing Appropriations and Extensions and Other Matters Act, 2026 Section-by-Section Summary Agencies operate at the prior year’s funding and priorities even when circumstances have changed, and months under a CR can mean operational harm that full-year bills don’t easily reverse.
What the Caps Did Not Control
Discretionary spending, for all the political attention it draws, makes up less than a third of the federal budget. The majority is mandatory, meaning it flows automatically under existing law without annual appropriations votes. Social Security, Medicare, Medicaid, and other entitlement programs pay benefits to anyone who qualifies, and those costs rise with demographics and inflation rather than congressional negotiation.
Net interest on the national debt also sits outside the discretionary budget. In FY2024, interest costs reached roughly $880 billion, one of the single largest line items in the federal budget and, for the first time, more than total defense discretionary spending. Rising interest rates in prior years drove much of the increase, and the cost is essentially locked in: the government must pay interest on bonds already issued regardless of what Congress does with new spending.
That is why the Fiscal Responsibility Act caps, real as they were, could only do so much. They governed the discretionary slice. Mandatory spending kept growing under its own legal momentum, and interest payments climbed as older debt was refinanced at higher rates.
How the Year Ended
When the books closed on September 30, 2024, the federal government recorded a deficit of $1.833 trillion, meaning total spending exceeded total revenue by that amount.1U.S. Treasury Fiscal Data. National Deficit The government collected roughly $5.08 trillion in revenue during the year, driven primarily by individual income taxes and payroll taxes, but outlays significantly outpaced collections.
The final number reflects everything at once: discretionary spending under the caps, mandatory entitlement payments, and surging interest costs on existing debt. The deficit was larger than the prior year’s, a result that shows the limited power of discretionary caps alone to bend the overall fiscal trajectory.