WASHINGTON, May 9 (Xinhua) — U.S. federal budget deficit totaled 360 billion dollars in the first seven months of fiscal year 2022 (from October 2021 through April 2022), according to Congressional Budget Office (CBO) estimates released Monday.
That amount is about one-fifth of the 1.9 trillion dollar shortfall recorded during the same period in fiscal year 2021, the CBO said in its monthly budget review.
Revenues were 843 billion dollars, or 39 percent higher and outlays were 729 billion dollars, or 18 percent lower than a year ago, the report showed.
The federal government realized a surplus of 308 billion dollars in April 2022, CBO estimates, noting that the federal government recorded a surplus in April of each year.
The deficit at this point last year and in 2020, 1.9 trillion dollars and 1.5 trillion dollars, respectively, was much larger because of spending in response to the COVID-19 pandemic — mostly for the recovery rebates (also known as economic impact payments), unemployment compensation, and pandemic relief, the report said.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a budget watch group, noted that over the first seven months of this fiscal year, the federal government borrowed a “staggering” 1.6 billion dollars per day.
“Meanwhile, our debt remains near record highs, inflation is the worst it’s been in 40 years, and lawmakers haven’t even started to discuss putting forward a budget,” MacGuineas said in a statement.
“The country needs a plan to get our borrowing under control,” MacGuineas said, noting that as a starting point, lawmakers should avoid legislative and executive actions that further add to deficits.
“More than that, they will need to increase revenues and control spending to make real progress,” she added.
The Peter G. Peterson Foundation, meanwhile, noted that the Federal Reserve’s decision to raise its target federal funds rate also has implications for the federal government’s borrowing costs and therefore the nation’s fiscal picture.
“As interest rates on U.S. Treasury securities rise, so too will the federal government’s borrowing costs,” the group said. “As the Federal Reserve increases the federal funds rate, short-term rates on Treasury securities will rise as well, making some federal borrowing more expensive.”
Expectations about short-term rates and inflation have already pushed up longer-term rates as well, the group added.
The group noted that Congresses and presidents of both parties, over many years, have “avoided making hard choices about our budget and failed to put it on a sustainable path.”
“It is vital for lawmakers to take action on the growing debt to ensure a stable economic future,” it said.