WASHINGTON — The U.S. budget deficit saw a record reduction for the 2022 financial year, a second straight annual drop that reflects the drying up of COVID-related aid spending alongside a surge in revenues propelled by wage and employment gains.
The deficit for the fiscal year through September narrowed to $1.38 trillion, from a revised $2.78 trillion the previous year, according to US Treasury Department data released Friday.
The deficit reduction came even after the Treasury accounted for President Joe Biden’s move to forgive a swath of student loans. The department said loan modifications had a $430 billion impact on the month of September, a sharp increase from the $137 billion recognition of such costs in September 2021. The Treasury said that it didn’t anticipate further such large-scale hits to the budget from the loan-forgiveness move in subsequent months.
