In the first two months of the budget year, the U.S. budget deficit was $356.4 billion.
A sharp increase in government revenues offsets a smaller rise in spending, so this figure is down 17% from a year ago.
During October and November, the government deficit was $72.9 billion below that during the same two months last year, according to the Treasury Department’s monthly budget report. Meanwhile, the government’s budget year officially begins on Oct. 1.
In the past two months, government revenues rose over the past two months, while spending rose at a slower pace.
In the October-November quarter, tax revenues amounted to $565.1 billion, which represents a sharp 23.6 percent increase over the same period a year ago and a benchmark for the first two months of the current fiscal year.
The huge increase in taxes is due to the continuing improvement in the economy, which has resulted in a rise in corporate profits and more people working, thereby increasing tax revenues.
Moreover, the higher revenue reflects businesses’ need to make up for last year’s deferred payments in Social Security taxes as a result of tax relief Congress granted during a recession caused by the pandemic.
During the first two months of the budget year, government spending reached $921.5 billion, a new record and 3.9% above the same period last year.
In the 2021 budget year, which ended September 30, the deficit totaled USD2.77 trillion.
Meanwhile, The $3.13 trillion deficit for 2020 was the second-highest yearly deficit ever.
Government spending approved by Congress to avoid a deeper recession during the years of COVID shutdowns inflated the deficits for both years.
In the current 2022 budget year, the deficit is expected to narrow to $1.2 trillion, according to the Congressional Budget Office.
According to CBO, until 2026, the deficits are projected to remain below $1 trillion until they surpass this mark once again.
The Treasury report for November stated that the deficit for November totaled $191.3 billion, an all-time high record in that month.