U.S. Budget Deficit Widened 454% in March -- Update
By John McCormick
The U.S. federal budget deficit widened 454% in March from a
year earlier, as the government issued a third round of stimulus
checks to help Americans ride out the economic fallout from the
The budget gap rose to $660 billion in March, the Treasury
Department said Monday, from $119 billion in the same month last
year. Revenue rose 13% to $268 billion in March, while spending
increased 161% to $927 billion.
The government's spending surge has provided some cushion to the
economy from the pandemic's devastation, but it has also sent
deficits soaring to levels not seen since the end of World War II
as a proportion of the economy. Weaker tax revenue has contributed
to the shortfall.
For the first six months of fiscal 2021, the deficit widened
130% to a record $1.7 trillion. Outlays from October through March
rose to $3.4 trillion, an increase of 45%. Receipts rose 6% to $1.7
Budget deficits are likely to remain at the center of debates
over the Biden administration's next major legislative effort: a
roughly $2.3 trillion proposal that aims to bolster long-term
economic growth through investments in infrastructure, clean energy
Higher costs for unemployment benefits, nutrition assistance,
healthcare and assistance to small businesses pushed government
spending higher, while stronger corporate tax collection and
remittances from the Federal Reserve lifted revenue, Treasury
The budget gap is on track to widen further, following enactment
of a $1.9 trillion aid package passed last month with only
Democratic votes that provided another round of stimulus checks for
many Americans, extended enhanced jobless benefits and provided
billions of dollars for vaccine distribution and school
The Congressional Budget Office projects the deficit for the
fiscal year ending Sept. 30 will total $2.3 trillion, almost $1
trillion less than last year's record gap but more than officials
projected in September.
Even before the latest aid package was passed, the CBO projected
that federal debt would equal 102% of gross domestic product in
2021. It has exceeded that level only twice before in U.S. history,
in 1945 and 1946, following a surge in federal spending as a result
of World War II.
Treasury officials said Fed remittances sent to the government
have increased 33% so far this fiscal year compared with last year,
as lower interest rates have held down the central bank's costs and
its growing portfolio of securities has yielded greater income.
Write to John McCormick at firstname.lastname@example.org
(END) Dow Jones Newswires
April 12, 2021 14:39 ET (18:39 GMT)
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