U.S. March budget deficit falls sharply as revenues surge, COVID outlays drop

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FILE PHOTO: The United States Department of the Treasury is seen in Washington, D.C.

(Reuters) – The U.S. government posted a $193 billion budget deficit in March, less than a third of the $660 billion gap a year earlier, the Treasury Department said on Tuesday, as COVID-19 relief outlays fell sharply and tax receipts surged to record levels.

The Treasury said March outlays were $508 billion, down 45% from March 2021, while receipts jumped 18% to $315 billion, a new March record, reflecting a strong U.S. economic recovery.

The March 2021 deficit of $660 billion had been a record for the month, driven by direct payments of $1,400 to millions of Americans under last year’s $1.9 trillion American Rescue Plan Act.

For the first six months of the 2022 fiscal year that started on Oct. 1, the Treasury reported a deficit of $668 billion, a 61% drop from the year-ago period.

Year-to-date outlays fell 18% from the first half of fiscal 2021 to $2.79 trillion, while receipts grew 25% to $2.122 trillion, a new first-half record.

The March receipts were driven largely by increases in individual withheld and non-withheld income taxes, reflecting lower unemployment levels compared to a year ago, Treasury official said.

(Reporting by David Lawder; Editing by Andrea Ricci)