U.S. Budget Gap Nears $2 Trillion With Five Months Left in Year

(Bloomberg) -- The U.S. budget deficit approached $2 trillion with five months left in the fiscal year, amid another wave of pandemic-relief payments stemming from President Joe Biden’s American Rescue Plan, enacted in March.

Last month’s shortfall of $225.6 billion pushed the gap for the first seven months of fiscal 2021 to $1.93 trillion, according to Treasury Department figures released Wednesday. That compared with a deficit of $738 billion in April 2020 and $1.48 trillion during the first seven months of the prior fiscal year.

While worries in Washington about federal deficits and debt have diminished in recent years, Biden has included hikes in corporate and individual taxes as part of his $4 trillion of long-term economic proposals aimed at infrastructure and social spending. The deficit for the full 2020 fiscal year was $3.13 trillion, the biggest relative to the size of the economy since World War II.

The April spending figures reflected $58 billion in stimulus payments, following a March total of $339 billion, according to the Treasury.

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