U.S. Treasury Secretary Janet Yellen listens to a reporter’s question during a press conference during the annual meetings of the International Monetary Fund and the World Bank in Washington, U.S., October 14, 2022.
Elizabeth Frantz | Reuters
The US budget deficit has been cut in half for fiscal year 2022, the biggest drop in history after two years of huge Covid-related spending.
Although still large in historical terms, the budget deficit fell to $1.375 billion from a deficit of $2.776 billion in 2021.
The drop would have been steeper if not for the Biden administration’s student loan forgiveness program. Education spending totaled $639.4 billion for the fiscal year, $408 billion more than expected.
Deficits for the previous two years soared as Congress spent massive sums to fight the pandemic.
In fiscal year 2021, lawmakers passed the US bailout, a $1.9 trillion spending package that the Biden administration says helped the country through a severe health and economic crisis. but which critics say was unnecessary and helped fuel the highest rate of inflation in more than 40 years. years.
Treasury Secretary Janet Yellen said Friday’s budget statement “provides further evidence of our historic economic recovery, driven by our vaccination efforts and the US bailout.”
Yellen added that the results also showed “President Joe Biden’s commitment to strengthening our country’s fiscal health.”
Earlier this year, the White House pushed through the Cut Inflation Act, targeting various areas including reducing medical costs, promoting clean energy and reforming the tax code. However, inflation continued to climb and administration officials emphasized the Federal Reserve’s primary role in tackling rising prices through interest rate hikes.
Fiscal 2022 saw $4.896 trillion in revenue versus $6.272 trillion in expenses. The spending number represented a drop of about $550 billion in spending, but an increase of $850 billion in revenue. The total is by far the highest ever recorded by the US government.