The Treasury Department released a report saying the federal deficit for fiscal year 2021 was just shy of the all-time record, $3.13 trillion, set in 2020. File Photo by Roger L. Wollenberg/UPI | License Photo
Oct. 22 (UPI) -- The U.S. federal deficit reached $2.77 trillion in fiscal year 2021, just shy of the milestone $3 trillion the Congressional Budget Office projected, the Treasury Department announced Friday.
The deficit for the fiscal year, which ended Sept. 30, was also short of the highest amount ever recorded -- $3.13 trillion in 2020.
The deficit has ballooned some 18 months into the COVID-19 pandemic, which wreaked havoc on the world economy due to lockdowns and job losses. The government spent trillions on recovery packages assisting individuals and businesses through the economic fallout of the pandemic.
The fiscal 2021 deficit showed slight improvement over thanks to a recovering economy and a return to work for millions of people.
"Today's joint budget statement is further evidence that America's economy is in the midst of a recovery," Treasury Secretary Janet Yellen said. "While the nation's economic recovery is stronger than those of other wealthy nations, it is still fragile."
Yellen urged passage of President Joe Biden's Build Back Better Act, a social spending plan that initially had a price tag of $3.5 trillion. Negotiations among Democrats, though, have whittled the bill down to between $1.75 trillion to $1.9 trillion to appease moderates wary of yet more spending.
"Passing President Biden's economic agenda will grow the economy, help workers and families, and strengthen our nation's long-term fiscal outlook," Yellen said.
Friday's report from the Treasury Department and Office of Management and Budget said there was an increase in government spending by 4.1% to $6.82 trillion, with a revenue of $4.05 trillion.
Despite the decline in the deficit from 2020 to 2021, fiscal year 2021 was still about triple that of 2019 -- $900 billion. The CBO projected in July that the federal deficit will drop to about $1.2 trillion in 2022 and $800 billion in 2023.
President Joe Biden delivers remarks at the ceremony marking the 10th anniversary of the dedication of the Martin Luther King, Jr. Memorial on the National Mall on Thursday. Photo by Oliver Contreras/UPI | License Photo