U.S. Budget Gap Rose 61% in First Quarter of Fiscal 2021
By Kate Davidson
WASHINGTON -- The federal budget gap widened in the first three
months of the fiscal year, as government spending continued to
outpace revenues while the economy slowly recovers from the
The U.S. Treasury Department said Wednesday the deficit from
October through December totaled a record $573 billion, a 61%
increase from the same period a year earlier. Federal outlays rose
18%, to $1.4 trillion, driven higher primarily by automatic
safety-net spending such as jobless benefits, nutrition assistance
and health care. Total receipts held steady, at $803 billion, the
For the 12 months that ended in December, the government ran a
$3.3 trillion deficit, more than triple the shortfall a year
earlier and roughly 15.8% of U.S. gross domestic product, the
broadest measure of economic output.
Government spending surged last year as Congress authorized
several measures to combat the coronavirus pandemic and cushion the
U.S. economy from recession, and federal revenues declined as
businesses closed and millions of Americans lost their jobs. The
Labor Department said last week the U.S. lost 140,000 jobs last
month, ending a seven-month streak of job creation as virus
outbreaks across the country prompted a new round of business
Lawmakers authorized another $908 billion economic relief
package last month, but Treasury officials said the government
didn't begin distributing the money -- including stimulus checks --
until this month, and it isn't reflected in the figures released
In the first three months of the fiscal year, which began Oct.
1, spending on nutrition assistance and other Agriculture
Department programs rose 37%; Medicaid spending climbed 22%;
Medicare rose 8%; and Labor Department outlays, which include
jobless benefits, increased 16-fold, to $80 billion from $5 billion
a year earlier.
Senior Treasury officials said Wednesday it is notable that
federal revenues were flat from October through December,
considering some employers opted to defer employment taxes during
the second half of the year.
Write to Kate Davidson at firstname.lastname@example.org
(END) Dow Jones Newswires
January 13, 2021 14:15 ET (19:15 GMT)
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