US projects nearly $3.12T budget deficit for this year, down $555B

The United States is projecting that the budget deficit this year will reach nearly $3.12 trillion, according to numbers released by the White House on Friday.

In its mid-session budget review, the administration said the deficit for the fiscal year ending Sept. 30 was projected to be $3.115 trillion, down $555 billion from the $3.670 trillion estimate in May.

The deficit is still on track to be the second largest deficit in history, narrowly avoiding last year’s deficit of $3.129 trillion.

The deficit worsened over the past couple years as the government distributed trillions in coronavirus relief aid to businesses and Americans.

Friday’s review attributed the improvement to the administration’s economic policies, particularly “the American Rescue Plan and the Administration’s whole-of-government response to the pandemic.”

For the next ten years, the administration doesn’t see the deficit falling below $1 trillion. 

The report estimated that gross domestic product (GDP) is expected to expand by 7.1 percent over the fourth quarter of last year, up from 1.9 percentage points from its prior estimate in May. 

The Commerce Department said Thursday that the GDP grew at a rate of 6.6 percent in the second quarter, just slightly faster than the 6.5 percent the agency initially estimated.