Federal deficit cut in half, ends the year at $1.4 trillion in the red

Federal deficit cut in half, ends the year at $1.4 trillion in the red

The good news is that the federal budget deficit was substantially trimmed in half over the last year. The bad news is that it was still $1.4 trillion.

The Treasury Department announced final numbers Friday for the fiscal year 2022, which closed out on Sept. 30. The data showed significant improvement as pandemic spending waned and the economy hummed.

Uncle Sam collected nearly $4.9 trillion in revenue, up from $4 trillion in 2021. And spending dipped, from $6.8 trillion last year to $6.3 trillion this year.

But the resulting $1.4 trillion gap between spending and income is still the fourth worst on record, behind the pandemic-besotted 2020 and 2021, and the Wall Street collapse year of 2009.

The 2022 deficit would have been even lower but for President Biden’s new student loan debt forgiveness, which the Congressional Budget Office said punched a $426 billion hole in September’s figures as the full multi-year cost was recorded up front on a present-value basis.

Other than that, CBO said government spending was lower than it had projected for the year, while income was higher.

“Revenues in all major categories, but notably individual income taxes, were greater than they were in fiscal year 2021. Spending related to the coronavirus pandemic declined, particularly for the recovery rebates (also known as economic impact payments); unemployment compensation; programs of the Small Business Administration (SBA); and transfers to state, local, tribal, and territorial governments,” CBO said in its year-end analysis.

The government’s big social safety net programs continue to grow, with Social Security spending up $83 billion or 7% and Medicaid spending up $72 billion or 14% in 2022.

And interest payments on the public debt rose by $121 billion or 29% as higher inflation forced Uncle Sam to pony up more.

Soruce : https://www.washingtontimes.com/news/2022/oct/21/federal-deficit-cut-half-ends-year-14-trillion-red/?utm_source=RSS_Feed&utm_medium=RSS

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