US 2021 deficit passes $2tr as COVID-19 spending surges

President Biden
US President Joe Biden. Image Credit: NYT

Washington: The US government posted a May deficit of $132 billion, about a third of the May 2020 deficit of $399 billion, as higher employment and an earlier tax deadline this year boosted receipts sharply, even as COVID-19 pandemic-related outlays grew, the US Treasury said on Thursday.

Receipts for May rose 167 per cent to $464 billion, an increase partly attributed to last year’s delay of the Internal Revenue Service income tax filing deadline until July 15. This year’s deadline shifted by a month to May 17.

The Treasury also said taxes withheld from wages increased by 20 per cent to $204 billion during May compared to a year ago, while May corporate taxes rose to $18 billion from $2 billion last year.

Outlays for May increased 4 per cent from a year earlier to $596 billion as benefits from President Joe Biden’s $1.9 trillion COVID-19 aid package continued to be paid out.

This spending also helped push the fiscal year-to-date deficit to a record $2.064 trillion from $1.88 trillion for the first eight months of the prior fiscal year, Treasury officials said.

Year-to-date receipts rose 29 per cent from a year earlier to $2.607 trillion, while outlays grew 20 per cent to $4.671 trillion.