By David Lawder

WASHINGTON (Reuters) -The U.S. budget deficit grew to $1.833 trillion for fiscal 2024, the highest outside of the COVID era, as interest on the federal debt exceeded $1 trillion for the first time and spending grew for the Social Security retirement program, health care and the military, the Treasury Department said on Friday.

The deficit for the year ended Sept. 30 was up 8%, or $138 billion, from the $1.695 trillion recorded in fiscal 2023. It was the third-largest federal deficit in U.S. history, after the pandemic relief-driven deficits of $3.132 trillion in fiscal 2020 and $2.772 trillion in fiscal 2021.

The fiscal 2023 deficit had been reduced by the reversal of $330 billion of costs associated with President Joe Biden's student loan program after it was struck down by the U.S. Supreme Court. It would have topped $2 trillion without this anomaly.

The sizable fiscal 2024 budget gap of 6.4% of gross domestic product, up from 6.2% a year earlier, could pose problems for Vice President Kamala Harris' arguments ahead of the Nov. 5 presidential election that she would be a better fiscal steward than Republican opponent Donald Trump.

A fiscal think-tank, the Committee for a Responsible Federal Budget, has estimated that Trump's plans would pile up $7.5 trillion in new debt, more than twice the $3.5 trillion envisaged from Harris' proposals.

White House budget director Shalanda Young emphasized the strong growth in the U.S. economy and the Biden administration's investments in clean energy, infrastructure and advanced manufacturing.

"This Administration has done this while maintaining a commitment to fiscal responsibility by ensuring the wealthiest among us and large corporations pay their fair share and cutting wasteful spending on special interests," Young said in a statement, referring to plans by Biden and Harris to raise taxes on these groups.

U.S. receipts for the 2024 fiscal year hit a record $4.919 trillion, up 11%, or $479 billion, from a year earlier, as individual non-withheld and corporate tax collections grew. Fiscal 2024 outlays rose 10%, or $617 billion, to $6.752 trillion.

INTEREST COSTS

The biggest driver of the year's deficit was a 29% increase in interest costs for Treasury debt to $1.133 trillion due to a combination of higher interest rates and more debt to finance. The total exceeded outlays for the Medicare healthcare program for seniors and for defense spending.

But a senior Treasury official said the interest costs as a share of GDP reached 3.93%, below the 1991 record of 4.69% but the highest percentage since 4.01% in December 1998.