the us budget deficit plunged by 77 percent in the first nine months of the fiscal year as the pandemic recovery brought in more tax revenues and covid19 spending wound down the budget gap fell 17 trillion to 515 billion for the octoberjune period the treasury department said wednesday as the economic recovery from the covid19 pandemic has picked up steam and companies return to normal government outlays on unemployment benefits dropped sharply while tax receipts from individuals and families picked up outlays dropped 18 percent compared to the prior fiscal year with labor department spending down 87 percent according to the report however as surging inflation has led to a steep increase in borrowing costs interest on the public debt jumped 24 percent consumer prices in june soared 91 percent cementing the likelihood the federal reserve will continue to aggressively raise the benchmark lending rate