U.S. federal budget deficit reaches 475 bln USD in first five months of FY 2022: CBO

The nonpartisan Congressional Budget Office (CBO) said on Tuesday that the U.S. federal budget deficit was estimated to have reached 475 billion U.S. dollars in the first five months of fiscal year 2022.

From October 2021 through February 2022, revenues were 371 billion dollars (or 26 percent) higher and outlays were 201 billion dollars (or 8 percent) lower than they were during the same period a year ago, according to CBO estimates.

“While February’s deficits are lower than this time last year, the fall largely reflects the end of one-time COVID relief, not an improvement in our underlying fiscal outlook,” said Maya MacGuineas, president of budget watchdog group the Committee for a Responsible Federal Budget.

“Faced with today’s challenges and record-high inflation, policymakers can’t keep heading down this unsustainable path,” MacGuineas said in a statement in response to the CBO’s newly released data.

MacGuineas noted that the emergency borrowing and spending put in place to fight COVID-19 was “necessary then, but not now,” urging lawmakers to put in place gradual changes that reduce spending, raise revenue, and “put this country on track to better financial footing.”

The U.S. national debt surpassed 30 trillion U.S. dollars on Feb. 1 for the first time amid elevated inflation and looming interest rate hikes, hitting a fiscal milestone and raising concerns about fiscal sustainability.

In his first State of the Union address last week, U.S. President Joe Biden blamed the previous administration for ballooning the deficit with massive tax cuts for the very wealthy and corporations, and renewed his push for a reform in the tax system.

According to the Committee for a Responsible Federal Budget, the national debt will still grow by more than 1 trillion dollars this year and nearly 13 trillion dollars over the next decade.