The federal budget deficit was $2.5 trillion in the first 10 months of fiscal year 2021, CBO estimates—$269 billion less than the deficit during the same period last year.
The federal budget deficit was $2.5 trillion in the first 10 months of fiscal year 2021, the Congressional Budget Office estimates—$269 billion less than the deficit recorded during the same period last year. Although outlays rose by an estimated $225 billion (or 4 percent), revenues rose more—by an estimated $494 billion (or 17 percent).
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—substantially boosted spending, both this year and last year. Outlays in the first 10 months of fiscal year 2021 were over $2 trillion more than spending during the same period two years earlier, in 2019. Outlays in 2020 rose almost as much. As a result, the deficits recorded during the first 10 months of 2020 and 2021 were significantly larger than the $867 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.
