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The federal budget deficit for fiscal year 2021 topped $2.77 trillion, the Biden administration announced on Friday.
The figure is $360 billion, or 11%, lower than the last fiscal year, which ran from October 2019 through the end of September 2020, and it featured enormous amounts of government spending to counter the economic effects of the coronavirus pandemic.
While spending rose by $266 billion in 2021, tax revenue rose by about $626 billion, or about 18%.
The new numbers show continued massive emergency spending in 2021, which included more rounds of stimulus spending and increased payouts for expanded social programs, including the child tax credit and supercharged unemployment benefits.
“Today’s joint budget statement is further evidence that America’s economy is in the midst of a recovery. The nation’s economic progress is the direct result of the Biden-Harris administration’s efforts to enact the American Rescue Plan and address the pandemic,” Treasury Secretary Janet Yellen said.
The Treasury Department highlighted on Friday that the 2021 deficit was $897 billion less than forecast in President Joe Biden’s 2022 budget and $342 billion less than predicted in the 2022 midsession review.
Spending in fiscal year 2021 was more than 50% higher than in 2019. The budget deficit prior to the pandemic in fiscal year 2019 was less than $1 trillion.
News of the deficit comes as Democrats in Congress work to negotiate a partisan infrastructure and social spending package, which could cost trillions. Republicans have pushed back on the legislation, claiming that it would damage the economy by adding to the country’s debt and inflating prices. Democrats argue that the spending will be offset by new taxes and will increase prosperity in the United States.
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Original Author: Zachary Halaschak