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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 May 2021, which is the eighth month of fiscal year (FY) 2021.
The deficit for May 2021 was $267 billion smaller than the deficit recorded in May 2020. That difference is largely because, this year, final payments for the individual income tax were due in May, whereas last year’s deadline was not until July. In addition, certain payments were shifted out of May 2021 because May 1 fell on a weekend. Without those shifts, the deficit in May 2021 would have been $207 billion smaller than the deficit in May 2020.
The cumulative deficit for the first eight months of FY21 was $184 billion larger than it was through the first eight months of FY20. The increase in the cumulative deficit reflects growth in spending this year of $771 billion that was partially offset by a $588 billion increase in revenues.
The sizeable deficit in FY20, and so far in FY21, has pushed up the current amount of debt held by the public by 25 percent relative to its level from before the onset of the COVID-19 pandemic. Once the situation has stabilized, policymakers should turn their focus to the country’s underlying fiscal situation.