The federal budget deficit was $2.2 trillion in the first nine months of fiscal year 2021, CBO estimates—$508 billion less than the deficit recorded during the same period last year, in part because some tax payments were due earlier this year.
The federal budget deficit was $2.2 trillion in the first nine months of fiscal year 2021, the Congressional Budget Office estimates—$508 billion less than the deficit recorded during the same period last year. Although outlays rose by an estimated $289 billion (or 6 percent), revenues rose more—by an estimated $797 billion (or 35 percent).
Outlays in the first nine months of fiscal year 2021 were almost $2 trillion more than spending during the same period two years earlier, in 2019, mostly because of programs and policies implemented in response to the coronavirus pandemic—notably, refundable tax credits (particularly the recovery rebates), expanded unemployment compensation, and the Small Business Administration’s Paycheck Protection Program. Outlays in 2020 also were boosted sharply by pandemic-related spending. As a result, the deficits recorded during the first nine months of 2020 and 2021 were significantly larger than the $747 billion shortfall recorded during the same period in fiscal year 2019.
By the end of this fiscal year (in September), if current laws governing taxes and spending remain unchanged, the budget deficit will reach $3.0 trillion, CBO estimates, the second largest shortfall since 1945. That amount is nearly $130 billion less than the deficit recorded in 2020 but triple the shortfall recorded in 2019. Relative to the size of the economy, CBO projects, this year’s deficit will total 13.4 percent of gross domestic product, a share exceeded only by the 14.9 percent recorded last year.