U.S. August budget deficit falls as revenues recover

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FILE PHOTO: The United States Department of the Treasury is seen in Washington, D.C.

By David Lawder

WASHINGTON (Reuters) – The U.S. government on Monday posted a $171 billion budget deficit for August, 15% lower than the $200 billion gap a year ago, as recovery-driven tax receipts grew faster than outlays for COVID-19 pandemic relief programs, the Treasury Department said.

The August deficit was $2 billion less than the average forecast by analysts in a Reuters survey. A U.S. Treasury official said the August budget results would not alter the department’s estimates for when Treasury’s extraordinary financing measures to avoid breaching the $28.4 trillion debt limit would be exhausted.

U.S. Treasury Secretary Janet Yellen last week urged Congress to increase or suspend the debt limit, saying that “cash and extraordinary measures will be exhausted during the month of October,” leaving the government unable to fully pay its obligations.

Receipts in August rose 20% from the year-earlier period to $268 billion while outlays in the month were up 4% to $439 billion. Some $59 billion in August benefits were paid in July because the month started on a non-business day.

For the first 11 months of the 2021 fiscal year, the deficit totaled $2.711 trillion, down 10% from the $3.007 trillion for the same period last year, as revenues improved.

Year-to-date receipts rose 18% from the same period last year to $3.586 trillion, while outlays rose 4% to $6.297 trillion.

(Reporting by David Lawder; Editing by Paul Simao)

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