October 21, 2022 11:00am EDT
US budget deficit cut in half to $1.38T as pandemic spending slows down
Biden's student loan forgiveness plan keeps US deficit high
By Megan Henney FOXBusiness
The U.S. federal budget deficit fell by half for the 2022 financial year as once-aggressive pandemic relief spending dried up and receipts surged, the Treasury Department said on Friday.
The gap between what the government spent and what it collected tumbled to $1.375 trillion at the end of September, down from the 2021 deficit of $2.776 trillion.
"Today’s joint budget statement provides further evidence of our historic economic recovery, driven by our vaccination effort and the American Rescue Plan," Treasury Secretary Janet Yellen said in a statement. "It also demonstrates President Biden’s commitment to strengthening our nation’s fiscal health."
Deficits in the past two years skyrocketed as Congress approved an unprecedented amount of spending to prop up the economy during the pandemic.
Critics noted the bulk of the deficit reduction stemmed from the phasing out of COVID-19 relief spending, including the massive $1.9 trillion package that Democrats unanimously passed last year and that experts say contributed to the spending-fueled inflation spike in the U.S.
The decline also would have been steeper if it were not for the Biden administration's student loan forgiveness plan: Education Department spending for the year totaled $639.4 billion, $408 billion higher than the estimate.
In September alone, the Education Department spent $445 billion, more than the combined monthly spending amounts from the Departments of Defense, Veterans Affairs, and Health and Human Services, plus the Social Security Administration.
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https://www.foxbusiness.com/economy/us-budget-deficit-cut-half-pandemic-spending-slows-down
