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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 October 2020, which was the first month of fiscal year (FY) 2021.
The deficit for October 2020 was $150 billion larger than the deficit recorded in October 2019. Last month’s deficit was affected by shifts in the timing of certain federal payments into October because November 1st fell on a weekend. Without those shifts, the October 2020 deficit would have been just $96 billion larger than the deficit recorded last October. 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 Congressional Budget Office anticipates that the federal deficit for this fiscal year will decline relative to last year’s total, but will be the second largest ever recorded (in dollar terms). The deficit in FY20 was the largest on record because of the economic effects of the COVID-19 pandemic and legislation enacted to respond to it.
The sizeable deficit in FY20 pushed up debt held by the public by nearly 25 percent. Eventually, once the situation has stabilized, policymakers should turn their focus to the country’s underlying fiscal situation.