U.S. budget deficit hit $207 billion in November

The U.S. budget deficit grew to $207 billion for November as federal spending related to the pandemic continued to be elevated and high levels of unemployment weighed on tax receipts.

The mounting red ink underscores the fiscal challenges that lawmakers and the incoming Biden administration will face in the next few months as they draft additional economic relief legislation to stimulate the economy. Congress and the White House are currently negotiating over a $900 billion relief bill that they hope to pass before the end of the year.

The monthly deficit was 35% higher than November 2019 when accounting for differences in the composition of business days. Without accounting for those calendar quirks, the monthly deficit was lower than a year ago.

For the fiscal year to date, the United States has recorded a $429 billion shortfall.

In November, the increases in the deficit were the result of higher spending on unemployment insurance, health care and food stamps.

A senior Treasury official said that tax collection was lower than usual because so many Americans remained out of work and because of President Donald Trump’s decision to allow workers to defer some payroll taxes to next year.

The federal budget deficit soared to a record $3.1 trillion in the 2020 fiscal year.

With President-elect Joe Biden set to take office next month, Republicans in Congress have expressed increasing concern about America’s fraught fiscal situation, while Democrats have called for more robust federal spending to help Americans weather the pandemic.