Budget shortfall hits record high over 7 months
WASHINGTON — The U.S. budget deficit surged to a record $1.93 trillion for the first seven months of the current budget year as the federal government spends billions of dollars appropriated for coronavirus relief packages.
The federal budget 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 from the impact of the coronavirus pandemic, which led the government to approve trillions of dollars in relief to cover three rounds of individual relief 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 the total for fiscal 2021, which began Oct. 1, will surpass that amount with some forecasting that the annual federal deficit could reach $3.3 trillion.
For April, the budget deficit totaled $225.6 billion, down from a monthly 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, revenue 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 large pandemic relief packages.
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.
Accumulating deficits add to the overall federal debt, which totaled more than $28.2 trillion as of Monday. That figure includes more than $6.1 trillion the government owes itself, including about $2.9 trillion borrowed from the Social Security Trust Fund, according to Treasury Department reports.
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.