The U.S. budget gap surpassed $2 trillion in the first eight months of fiscal 2021 as government stimulus flowed into the economy to combat the coronavirus pandemic.
The shortfall in the year through May was $2.06 trillion, compared with $1.88 trillion in the year-earlier period, according to Treasury Department data released Thursday. On a monthly basis, the gap was $132 billion in May compared with $398.8 billion in May 2020, amid the initial wave of Covid-19 relief.
Republicans and fiscal conservatives have pointed to the rising debt load as a risk for the U.S. economy, particularly as inflation pressures build and potentially boost interest payments on that debt. At the same time, debt concerns in Washington have generally diminished in recent years amid sustained low interest rates, and the Biden administration foresees that the national debt will increase only slightly in the coming decade.
President Joe Biden’s proposed budget, released last month, estimates a deficit of $1.84 trillion in fiscal 2022 after $3.67 trillion in the current year, assuming Congress passes his economic-investment and tax agenda.
The May budget data showed $595.7 billion in federal spending, while receipts totaled $463.7 billion, with “greater outlays associated with the pandemic response” outweighing the shift in the due date for taxes, Treasury said. Stimulus payments totaled $11 billion, down from $58 billion in April and $339 billion in March.