May 15, 2021 - Economy

Budget deficit reaches record $1.9 trillion so far this year

Jacob Knutson

Treasury Secretary Janet Yellen speaking during a press conference in the White House on May 7. Photo: Alex Wong/Getty Images

The U.S. budget deficit hit a record $1.9 trillion in the first seven months of this fiscal year, according to the Treasury Department's monthly budget report.

Why it matters: It's roughly a 30% increase from the same time period in the last fiscal year and is largely due to the passage of massive relief bills to combat the economic fallout of the coronavirus pandemic.

Context: The deficit for the last fiscal year was $3.1 trillion, and some private economists are estimating this fiscal year's deficit will surpass last year's.

Some are forecasting a deficit of $3.3 trillion the fiscal year, according to AP.

By the numbers: Outlays for the seven-month period totaled $4.07 trillion, up 25.8% from the same period a year ago, reflecting higher safety-net spending.

Tax revenue hit $2.1 trillion, a 16% increase, in part from quarterly tax payments in April.

The big picture: The U.S. economy is expected to boom this year as the pandemic tapers off and thanks to trillions of dollars in government spending.

Go deeper: Here comes the reopening boom

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Budget deficit reaches record $1.9 trillion so far this year

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