The US government reported a budget deficit of $262 billion in February, an increase of 21% from the previous year. The increase was due to higher expenses and lower revenues, primarily caused by the surge in outstanding tax refunds. The Treasury Department revealed that the budget deficit for February widened from $217 billion in 2022.
The government’s revenue dropped by 10%, or $28 billion, to $262 billion in February, while expenses increased by 4%, or $18 billion, to $525 billion. Despite a 4% rise in personal income tax revenue in February, or $10 billion compared to the previous year, personal income tax refunds rose by 153%, or $31 billion, to $52 billion. The refund included balances due since the COVID-19 pandemic.
The widening budget deficit comes as President Joe Biden’s administration seeks to implement a $1.75 trillion package that includes new healthcare, education, and climate-change spending, which they claim would be funded by a rise in taxes on the wealthy. The US has run a budget deficit in 59 of the past 60 years, with the pandemic causing an unprecedented $3.1 trillion deficit last year.