The recent rise in corporate profits and people returning to work help reduce the federal deficit, dropping it below the federal deficit from the same period last year.
For the October-November period, the U.S. budget deficit amounted to $356.4 billion, a 17 percent decrease from the same period in 2020. It was $72.9 billion below last year's deficit for the period, the Treasury Department said Friday in its monthly budget report.
The Treasury report also said that in November, the deficit was $191.3 billion, which is a record high for the month.
The Congressional Budget Office (CBO) is projecting the deficit for the 2022 budget year to be $1.2 trillion. The CBO estimates that annual deficits will stay under $1 trillion until 2026, when it will increase past $1 trillion through 2031, according to Fortune.
The reduction in the federal deficit shows that governments revenues have increased at a faster rate than government spending during the two-month period.
Tax revenues amounted to $565.1 billion in the past two months. This is a 23.6 percent increase from the revenues during the same period last year, as well as a record for the budget year's first two months. The government's budget year begins on October 1.
Individual tax payments were increased because of millions of people returning to work. The growth in revenue show that businesses are having to make up for their part of Social Security tax payments. The tax relief Congress approved last year postponed the payments during a recession due to the pandemic.
The CBO also projects that over the next decade, the federal deficits will add $12.1 trillion to the U.S. national debt, Fortune reported.
However, the CBO estimations do not take into account the spending from the $1 trillion infrastructure bill that was passed recently nor any other possible spending measures from President Joe Biden, according to Fortune.
Government spending totaled $921.5 billion, also a record for the first two months of the budget year, and 3.9 percent higher than the same two months last year.
The budget deficit totaled $2.77 trillion for the 2021 budget year that ended September 30. That was the second-highest annual deficit on record, exceeded only by the $3.13 trillion deficit for 2020.
The deficits for both years were inflated by the trillions of dollars in government spending approved by Congress to keep the country from sliding into a deeper downturn because of the COVID shutdowns.
The Associated Press contributed to this report.
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