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Every month the U.S. Treasury releases data on the federal budget, including the current deficit. The following contains budget data for December 2020, which was the third month of fiscal year (FY) 2021.
The deficit for December 2020 was $130 billion larger than the deficit recorded in December 2019. In both years, certain payments were shifted into December because January 1 is a holiday. December 2020 also contained payments that would have occurred on January 3, 2021 had that date not fallen on a weekend. In addition, because December 1, 2019 fell on a weekend, some payments from that month shifted into November 2019.
Without such timing shifts, the December 2020 deficit would have been $56 billion larger than the deficit recorded in December 2019. The deficit varies from month to month and some months may even record a surplus — for example, when taxpayers are submitting their personal income taxes at the filing deadline.
The cumulative deficit for the first three months of FY21 was $216 billion larger than it was through the first three months of FY20. The increase in the cumulative deficit reflects a $213 billion increase in outlays and a $3 billion decrease in revenues. Without shifts in the timing of certain federal payments arising from January 3, 2021 falling on a weekend, and January 1 of both years being a holiday, the deficit for the first three months of FY21 would have been $192 billion larger than the deficit for the same period in FY20.
The sizeable deficit in FY20 pushed up debt held by the public by 25 percent relative to a year ago. Eventually, once the situation has stabilized, policymakers should turn their focus to the country’s underlying fiscal situation.