U.S. budget deficit shrinks to $2.2 trillion in first nine months of fiscal 2021

The United States budget deficit shrinks to $2.2 trillion in the first nine months of the fiscal year from the same time the previous year, as the economy recovers from the pandemic and tax revenue increases. 

The Treasury Department said Tuesday that spending for the first three quarters of the fiscal year increased by 6% to $5.3 trillion. Pandemic-related expenditures like tax rebates, extra unemployment compensation, emergency small-business loans, and stimulus cheques to consumers have increased spending, WSJ reported. 

The government reported a $174 billion June deficit, roughly a fifth of the $864 billion in June 2020.  

For June receipts increased by 87 % to $449 billion, owing in part to this year's Internal Revenue Service income tax filing deadline being moved ahead to May 17 from last year's pandemic-induced delay to July 15.

The Treasury also said that taxes deducted from wages climbed by 33% on an adjusted basis to $240 billion in June compared to a year earlier, while corporate taxes surged to $79 billion in June from $11 billion the previous year.

Outlays for June fell 44 % year on year to $623 billion.

The nonpartisan Congressional Budget Office said in a separate report issued late last week that it anticipates expenditure in the first nine months of this fiscal year to be nearly $2 trillion more than spending in the same time before the pandemic began.

According to the CBO, the federal budget deficit for this fiscal year will be around $3 trillion.

The CBO's fiscal 2021 deficit forecast is at 13.4 % of GDP, down from 14.9 % in fiscal 2020. The deficit is expected to shrink considerably to $1.153 trillion, or 4.7 % of GDP, in fiscal 2022, and $789 billion, or 3.1 %, in fiscal 2023, the report stated.