Wednesday, February 28, 2024

In the Red: US Deficit Up 25% in First Two Months of Budget Year | News from the United States and Canada

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The US Treasury reported that just two months after the start of the new fiscal year, the deficit was already $ 429.3 billion.

The US government deficit in the first two months of the budget year increased 25.1% from the same period a year ago, as spending to deal with the COVID pandemic -19 soared as tax revenues declined.

The Treasury Department reported Thursday that with two months in the budget year, the deficit stood at $ 429.3 billion, up from $ 343.3 billion in October-November last year.

The deficit – the gap between what the government collects in taxes and what it spends – reflects an 8.9% increase in spending, to $ 886.6 billion, and a 2.9% decline in revenue taxes, to $ 457.3 billion.

Spending for the first two months of the budget year, which begins October 1, also set a record, while the deficit over the same period was also a record.

The government deficit for the fiscal year that ended Sept. 30 was a record $ 3.1 trillion, fueled by the more than $ trillion spending measures that the U.S. Congress passed in the spring to fight the economic slowdown triggered by the pandemic. The recession, which has seen millions of people lose their jobs, has resulted in lower tax revenues.

Congress is debating another relief package that could total nearly $ 1 trillion, which would add to the red ink this year. Without taking into account other relief measures, the Congressional Budget Office has forecast that this year’s deficit will reach $ 1.8 trillion and remain above $ 1 trillion each year until 2030.

Before last year’s $ 3.1 trillion deficit, the record holder was a $ 1.4 trillion shortfall in 2009, when the government was struggling to pull the country out of a deep recession caused by the 2008 financial crisis.

The federal government deficit in November was $ 145.3 billion.


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