The Biden administration said Friday that the 2021 U.S. budget deficit was $360 billion lower than in 2020. The deficit figure hit $2.77 trillion in the fiscal year ending Sept. 30, marking the second-highest figure in history behind $3.31 trillion in 2020, the Associated Press reported.
The budget deficit for 2021 reflects the trillions of dollars in government spending during the COVID-19 pandemic offset by increasing revenue, according to the AP.
Prior to the onset of the pandemic, the largest historical deficit was $1.9 trillion in 2009, when the U.S. spent trillions to bring the country out of the 2008 recession, the AP reported.
Government spending increased by 4.1% to $6.82 trillion in 2021, according to the joint report from the Treasury Department and Office of Management and Budget (OMB), the AP reported. The spending was offset by a 1.83% increase in government revenues, reflecting a recovering economy as people return to work and spend more money.
“Under President Biden’s leadership, the U.S. economy is getting back on track and Americans are getting back to work,” said Treasury Secretary Janet Yellen and Shalanda Young, director of the OMB, in a joint statement.
Yellen called the new deficit number “further evidence that America’s economy is in the midst of a recovery,” according to The Wall Street Journal.
The non-partisan Congressional Budget Office (CBO) projects that the deficit will dip $1.15 trillion in 2022 fiscal year, which started Oct. 1, according to the AP. The CBO projects the budget will fall by $1 trillion for three more years, from 2023 through 2025, then spike above $1 trillion every year through 2031.
President Joe Biden signed a $480 billion extension to the federal debt ceiling on Oct. 14, temporarily avoiding a Treasury default on debt, the Daily Caller reported. The Senate passed the short-term extension on Oct. 7, and the House approved it on Oct. 12.
The short-term extension allows the government to pay its bills through Dec. 3, according to the WSJ. Yellen has said that this deal provided “only a temporary reprieve.”
The Treasury Department did not immediately respond to the Daily Caller News Foundation’s request for comment.
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