The recent increase in corporate profits and the return to work are helping to reduce the federal deficit, bringing it below the federal deficit for the same period last year.
For the period October-November, the US budget deficit stood at $ 356.4 billion, a decrease of 17% compared to the same period in 2020. It was $ 72.9 billion lower than the deficit of last year for the period, the Treasury Department said in its monthly budget report Friday.
The Treasury report also said that in November the deficit was $ 191.3 billion, which is a record for the month.
The Congressional Budget Office (CBO) projects the deficit for the 2022 budget year to be $ 1.2 trillion. The CBO estimates that annual deficits will remain below $ 1,000 billion until 2026, when they will exceed $ 1,000 billion until 2031, according to Fortune.
The reduction in the federal deficit shows that government revenues grew at a faster rate than government spending during the two-month period.
Tax revenues amounted to $ 565.1 billion in the past two months. This is a 23.6% increase over revenues for the same period last year, as well as a record for the first two months of the budget year. The government’s fiscal year begins on October 1.
Individual tax payments have been increased due to the return to work of millions of people. Income growth shows that companies need to catch up with their share of social contributions. The tax break approved by Congress last year postponed payments during a recession due to the pandemic.
The CBO also predicts that over the next decade federal deficits will add $ 12.1 trillion to the US national debt, Fortune reported.
However, the CBO’s estimates do not take into account spending on the recently passed $ 1,000 billion infrastructure bill or any other possible spending measures by President Joe Biden, according to Fortune.
Government spending totaled $ 921.5 billion, also a record for the first two months of the budget year, and 3.9% more than the same two months last year.
The budget deficit totaled $ 2.77 trillion for fiscal year 2021 which ended on September 30. It was the second-highest annual deficit on record, surpassed only by the $ 3.13 trillion deficit for 2020.
The two-year deficits have been inflated by the trillions of dollars in government spending approved by Congress to prevent the country from slipping into a deeper downturn due to COVID shutdowns.
The Associated Press contributed to this report.