US records second highest budget deficit in history

Checking USD at a currency exchange counter.

The US Treasury Department announced on October 22 that the US federal budget deficit in fiscal year 2021 was 2.8 trillion USD, the second highest level in history and only 360 billion USD lower than the previous fiscal year.

In fiscal year 2020, the US federal budget deficit reached $3.1 trillion as many domestic businesses had to temporarily close to prevent the COVID-19 pandemic. This figure is more than double the record set in 2009, when the deficit was recorded at $1.4 trillion a year after the 2008 economic-financial crisis.

In a statement, the Treasury Department and the White House Office of Management and Budget (OMB) said the deficit in fiscal year 2020 was still $897 billion lower than previously estimated.

In July, the Congressional Budget Office (CBO) also projected the budget deficit this fiscal year to be around $3 trillion.

According to the report, in fiscal year 2020, the total revenue of the US government reached 4,000 billion USD, up 18.3% compared to the previous fiscal year and exceeding the previous forecast in the president's budget. Meanwhile, government spending reached 6,800 billion USD, up 4.1% but still lower than expected.

The increased spending is largely due to COVID-19 relief efforts under the CARES Act under former President Donald Trump and the "American Rescue Plan" under the administration of President Joe Biden.

The current budget deficit provides further evidence that President Biden's economic plan is working, according to acting OMB Director Shalanda Young.

Treasury Secretary Janet Yellen also said this was evidence of the US economy recovering and was a direct result of the government's efforts to enact the American Rescue Plan during the pandemic.

According to VNA