U.S. budget deficit cut in half for biggest decrease ever amid Covid spending declines

U.S. Treasury Secretary Janet Yellen listens to a reporter's question at a news conference during the Annual Meetings of the International Monetary Fund and World Bank in Washington, U.S., October 14, 2022. 

After two years of huge Covid-related spending, the U.S. budget deficit was halved in the fiscal year that ended in June.

The budget shortfall is still large in historical terms, but it has declined.

Had it not been for the student loan forgiveness program, it would have been worse. The fiscal year's education spending was higher than estimated.

In the fiscal year that ended in February of 2022, revenue was $4.896 trillion while outlays were $6.272 trillion. The outlays number showed a decline in spending but an increase in revenue. The US government's revenue total is the highest it has ever been.

Congress spent a lot of money to fight the Pandemic.

There was a record $3.13 trillion shortfall in 2020 due to overspending by the government. The deficit was almost a billion dollars. The highest deficit ever was in 2009, when the financial crisis ended. There was a brief surplus from 1998 to 2001.

The American Rescue Plan, which the Biden administration said helped get the nation through a severe health and economic crisis, but which critics say was unnecessary and helped fuel the highest inflation rate in more than 40 years, was passed in fiscal 2021.

The budget statement released Friday provides further evidence of our historic economic recovery, driven by our vaccination effort and the American Rescue Plan, according to the Treasury Secretary.

The president's commitment to strengthen our nation's fiscal health was shown in the results.

The Inflation Reduction Act was pushed through by the White House in order to reduce medical costs and boost clean energy. Administration officials stress the Federal Reserve's role in fighting price increases through interest rate hikes.