The U.S. government‘s deficit in the first two months of the budget year ran 25.1 per cent higher than the same period a year ago as spending to deal with the COVID pandemic soared while tax revenues fell.
The Treasury Department reported Thursday that with two months gone in the budget year, the deficit totaled USD 429.3 billion, up from USD 343.3 billion in last year’s October-November period.
The deficit the shortfall between what the government collects in taxes and what it spends reflected an 8.9 per cent jump in outlays, to USD 886.6 billion, and a 2.9 per cent decline in tax revenues, to USD 457.3 billion.
Spending for the first two months of the budget year, which begins Oct 1, also set a record, while the deficit over the same period was also a record.
The government’s deficit for the budget year that ended Sept. 30 was a record-shattering USD 3.1 trillion, fueled by the trillion-dollar-plus spending measures Congress passed in the spring to combat the economic downturn triggered by the pandemic.
The recession, which has seen millions of people lose their jobs. has meant a drop in tax revenues.