The U.S. budget deficit grew to a record $2.1 trillion during the first eight months of the fiscal year as spending continued to outpace tax receipts that are rising as the economy recovers from the damage inflicted by the Covid-19 pandemic.
Federal revenue for the eight-month period ending in May rose 29%, to a record $2.6 trillion, primarily due to higher receipts from individual and corporate income taxes, the Treasury Department said Thursday.
Outlays rose 20%, to a record $4.7 trillion, driven by payments for jobless benefits, nutrition assistance and Covid-19 relief programs including emergency small-business loans and stimulus checks to households.
For the month of May, the deficit was $132 billion, roughly a third of what it was a year earlier. Revenue rose 167% to $464 billion, while spending increased 4% to $596 billion. Changes in tax-payment deadlines because of the pandemic contributed to the monthly revenue fluctuation.
The government’s spending surge has propelled a rapid recovery from the pandemic-induced economic slump while also helping send the federal debt—as a proportion of the economy—soaring to levels not seen since the end of World War II.
