The US government on Friday announced a $1.7trillion (£1.39trillion) budget deficit for 2023 fiscal, a 23 per cent jump from 2022.
It comes as revenues fell and expenditures for Social Security, Medicare and record-high interest costs on the federal debt grew.
The Treasury Department said the deficit was the largest since a COVID-fuelled $2.78trillion (£2.28trillion) gap in 2021.
The deficit comes as Biden is asking Congress for $100billion (£81.94billion) in new foreign aid and security spending.
WATCH NOW: Biden in Israel
This includes a $60billion for Ukraine and $14billion for Israel.
The deficit is likely to enflame Biden’s fiscal battles with Republicans, whose demands for spending cuts pushed the US to the brink of default in early June over the debt ceiling.
“Falling revenues are a significant contributor to the 2023 deficit, underscoring the importance of President Biden's enacted and proposed policies to reform the tax system,” Treasury Secretary Janet Yellen and Office of Management and Budget Director Shalanda Young said in a joint statement.
The fiscal 2023 deficit would have been $321billion larger but was reduced because the Supreme Court said Biden's student loan forgiveness program was unconstitutional.
The ruling forced the Treasury to reverse a pre-emptive charge against fiscal 2022 budget results that increased that year's deficit.
Despite President Biden’s first two years in office being plagued with economic decline, he has focused on the economy as a part of his campaign to get re-elected.
His focus on “Bidenomics” – policies focused on relief measures and vaccination efforts after the pandemic – is a central part of his re-election pitch.
However, some Democrats have criticised this intense focus, urging the president to reangle his campaign message, as housing, food and energy continue to rise.
Instead, they have recommended he focus on the “danger” posed by Trump.
The deficit comes as Biden is asking Congress for $100 billion in new foreign aid and security spending.
The campaign has cost nearly $91million, more than “any Democratic candidate in history at this point in the cycle”, campaign officials said.
A poll conducted by Morning Consult and Bloomberg showed that Bidenomics is actually working against the President and in Donald Trump’s favour.
A poll sampling over 5,000 voters across Arizona, Georgia, Michigan, Nevada, North Carolina, Pennsylvania, and Wisconsin found that 49 per cent of people trust Trump “significantly more” than Biden.
Just 35 per cent of voters said they trusted Biden more.
“If Biden isn’t getting credit for how he’s improved the economy by now, then he won’t get such credit anytime soon. I say this as a Democrat who supports President Biden and was the press secretary for his wife, Jill Biden, the president needs to reevaluate the approach to how and what he is communicating to the American people,” said Michael LaRosa, the former press secretary for the first lady.