Mr. Burns. I think I see where they got the idea for The Simpsons.

The monthly federal deficit was a record-setting $249 billion in November, $57 billion wider than the same month last year https://t.co/BXrOeLxqRi

— WSJ Central Banks (@WSJCentralBanks) December 12, 2022

As the Federal Reserve rapidly raises interest rates to combat the highest inflation in decades, a slowing economy could also result in lower tax receipts going forward.

With Republicans set to assume control of the House next year, the federal government’s finances could once again become a political flashpoint. Some Republicans have said they could refuse to raise the nation’s borrowing limit without an agreement on broad cuts to the federal budget, including potentially Social Security and Medicare.

Such a debate could bring the U.S. to the brink of defaulting on its debt, a feature of clashes between Republicans and Democrats during the Obama presidency. During the Trump era, Republicans largely let go of their concerns about government spending and reached multiple agreements with Democrats to raise the borrowing limit without imposing deep spending cuts.