WASHINGTON—The U.S. budget deficit topped $1.8 trillion in the latest fiscal year, driven by higher spending on interest and programs for older Americans, as the government faces a persistent gap between federal outlays and tax collections.

Yet again, the federal government spent far more than it collected in revenue, racking up a budget deficit of $1.8 trillion for fiscal year 2024, according to the Congressional Budget Office.

The federal budget deficit swelled to $1.8 trillion in the fiscal year that ended in September, an enormous sum that significantly increases the national debt as Washington barrels toward a potential 2025 showdown over spending and taxes.