Large and sustained federal budget deficits are harmful to the fiscal health of the United States. Yet policymakers struggle with reining in the red ink.
Even in times of economic growth, the federal government ran large and growing budget deficits, near $1 trillion per year. The U.S. budget deficit mushroomed by 2% last month to $209 billion, another step in a journey back toward 1 trillion dollars a year budget deficits.
The Congressional Budget Office estimates that the federal government ran a deficit of $173 billion in June, the ninth month of fiscal year 2021. June’s deficit was the difference between $450 billion in revenue and $623 billion in spending.
So far this fiscal year, the federal government has run a cumulative deficit of $2.2 trillion, the difference between $3.1 trillion in revenue and $5.3 trillion in spending. This deficit is nearly triple the shortfall over the same period in FY2019 ($1.5 trillion greater) but is 19% ($508 billion) lower than at the same point in FY2020.