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US Budget deficit hits record $1.9 trillion in current fiscal year

Sunday, 16 May 2021 1:51 AM [ Last Update: Sunday, 16 May 2021 1:51 AM ]

File photo of US Secretary of the Treasury Janet Yellen

The US budget deficit has hit a record $1.9 trillion just in the first seven months of the current fiscal year, according to the Treasury Department's monthly budget report.

It marks nearly a three-percent increase compared to the same time period in the 2020 fiscal year and is mainly due to the legislative passage of substantial relief bills to combat the economic consequences of the coronavirus pandemic, AP reported Saturday.

According to the report, the deficit for the last fiscal year stood at $3.1 trillion, and some private economists are estimating that the deficit in the current fiscal year will surpass that of the previous year, with some forecasting a deficit of $3.3 trillion.

Government expenditures for the seven-month period totaled $4.07 trillion, up 25.8 percent compared to the same period last year, reflecting higher safety-net spending, the report added.

It further noted that tax revenues has so far brought in $2.1 trillion, a 16-percent increase from last year, partially from quarterly tax payments in April.

The development comes as US Commerce Secretary Gina Raimondo emphasized last week that many Americans continue to struggle to return back to work as millions of jobs were perished by the COVID-19 pandemic.

US has long way to go to recover from COVID pandemic: Commerce...

"I think we have a long way to go to recover from the pandemic," she said. "There are so many Americans still struggling" and 8 million fewer jobs than there were before the pandemic.”

The US Labor Department reported that only 266,000 new jobs were created in April, a fraction of the nearly 1 million jobs economists anticipated.

Raimondo further explained that the lower-than-expected employment data were a reflection of Americans struggling to find jobs.

House Speaker Nancy Pelosi also stated, "The disappointing April jobs report highlights the urgent need to pass President Biden’s American Jobs and Families Plans," referring to the White House's proposals for about $4 trillion in additional spending on infrastructure, education and other priorities.

Some US press reports have also attributed the low US job growth to shortages of workers and raw materials.

According to a projection by the nonpartisan Congressional Budget Office (CBO), it will take the US economy until 2030 to restore the jobs lost to the pandemic, and return the unemployment rate to pre-COVID levels.

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