The new federal fiscal year has begun with some good — or at least less bad — news, as Uncle Sam ran a smaller deficit in October than a year ago, according to a new estimate Monday by the Congressional Budget Office.
The $167 billion shortfall CBO projects for the month is $117 billion less than the deficit in October 2020.
CBO said revenue rose 20% while spending was 70% less. Last year at this time the government was still shoveling out cash amid the pandemic for programs like emergency unemployment insurance. Those costs have dissipated this year.
The data is the first from fiscal year 2022, which began Oct. 1.
The government ended fiscal year 2021 with the second-largest deficit in history at $2.8 trillion. The record was set in 2020, at $3.1 trillion.
Debt to gross domestic product, a key measure of the government’s long-term fiscal burden, also declined last year, falling under 100% of GDP. CBO analysts said even though Washington ran a large deficit, the economy, as measured by GDP, grew even faster.
The final 2021 deficit figure was also $231 billion less than CBO had predicted in July, which the analysts said was also attributed to higher taxes paid.
Indeed, revenue surged to a record $4 trillion, up from about $3.5 trillion in 2019 and $3.4 trillion in 2020.
The problem is that spending topped $6.8 trillion, leaving the massive hole in the government’s budget.
CBO’s estimates are a projection based on daily Treasury Department statements. Treasury will issue the official numbers later this month.