The U.S. budget deficit surged to a record of $1.9 trillion for the first seven months of this budget year, bloated by the billions of dollars being spent in coronavirus relief packages.
The shortfall so far this year is 30.3% higher than the $1.48 trillion deficit run-up over the same period a year ago, the Treasury Department said Wednesday in its monthly budget report.
The oceans of red ink in both years are largely due to the impact of the coronavirus pandemic, which led the government to approve trillions of dollars in relief to cover three rounds of individual payments, extra unemployment benefits, and support for small businesses.
The deficit for the budget year that ended Sept. 30 totaled a record $3.1 trillion and many private economists believe this year’s total will surpass that amount. Some are forecasting a deficit of $3.3 trillion.
For April, the deficit totaled $225.6 billion, down from a deficit in April 2020 of $738 billion. That improvement reflected the fact that fewer relief payments were made this year and individuals making quarterly tax payments had to meet the normal April deadline. Last year, all tax payments were delayed at the onset of the pandemic.
For the October-April period, revenues totaled $2.14 trillion, up 16.1% over the same period a year ago, a gain that was boosted by individuals’ quarterly tax payments in April. The April payment was delayed last year after 22 million people lost their jobs because of the pandemic shutdowns.
Outlays for the first seven months of this budget year totaled $4.07 trillion, up 25.8% from the same period a year ago, as the government in both periods was passing massive pandemic relief bills.
The $1.93 trillion deficit for the first seven months of this budget year was $459.4 billion higher than the $1.48 trillion deficit run-up in the same period a year ago.
