The federal deficit in October and November, the first two months of the 2021 fiscal year, came to $430 billion, an increase of $87 billion, or 25 percent, over the same period last year, according to the nonpartisan Congressional Budget Office.
Deficits have soared since President Trump took office, reaching nearly $1 trillion in 2019. Extraordinary fiscal efforts to prevent an economic collapse due to the COVID-19 pandemic brought the 2020 deficit to a record-shattering $3.13 trillion.
For comparison, the full-year deficit in 2016 amounted to $585 billion.
The first two months of the current fiscal year saw government revenue drop by 3 percent, largely because individual income and payroll taxes suffered as people lost jobs.
Outlays, in the meantime, jumped 9 percent, though timing changes on certain payments last year disguise the true extent of the increase. Without the differently timed payments, the increase would have been 16 percent.
A significant portion of the jump was due to unemployment compensation, which increased thirteenfold, from $4 billion to $52 billion.
Federal Reserve Chairman Jerome Powell has said more fiscal stimulus is necessary to push the economy into a strong recovery. But budget-watchers warn that once the economy gets back on its feet, steps will be necessary to tame the deficit and bring down the national debt, which could itself start weighing on the economy over time.