Monthly budget deficit soars to record high of $864 billion
WASHINGTON (CN) — The U.S. budget deficit hit a historic high of $864 billion in June, in large part due to a surge in federal spending aimed at stabilizing the economy during the coronavirus pandemic.
New data released by the Treasury Department on Monday shows a nearly $856 billion increase in the deficit as compared to last June, thanks to more than $1.1 trillion in government spending added during the month. At the same time, the federal government brought in $240 billion, a figure somewhat in line with revenue from recent months, though lower than last year’s $333 billion total for June.
Federal receipts have been significantly lower than the same period the year before in every month since April, an impact of the government pushing the tax filing deadline into July.
The Treasury Department reported a similarly large $738 billion deficit in its April report, a figure that at the time was itself a monthly record.
Overall, the deficit from the first nine months of the fiscal year stands at more than $2.7 trillion.
Much of the new spending came from the Small Business Administration, which saw $511 billion from pandemic relief initiatives, including the Paycheck Protection Program, hit the ledger for the first time.
Loans made under the program can be forgiven for businesses that use the money to meet payroll, rent and certain other expenses and it is anticipated most of the $517 billion in loans approved through the end of last week will be forgiven and end up on the federal government’s books.
The data the Treasury Department released on Monday is comparable to an estimate from the Congressional Budget Office last week, which pinned the deficit at $863 billion.
Congress has already authorized $3.6 trillion in federal spending in response to the pandemic, according to the Committee for a Responsible Federal Budget, and lawmakers are expected to push for a new round of spending as cases soar again.
But the details of any such legislation remain unclear, as Republicans have expressed reservations about another massive spending deal when large sums remain unspent from earlier congressional action.
One pressing deadline is July 31, when the expanded unemployment insurance benefit that was part of the first coronavirus relief package is set to expire. Many Republicans have expressed reservations about extending the benefit, at least at current levels, saying it could tamp down employment and arrest an economic recovery.
Democrats have been adamant about extending the benefit, calling it necessary in a virtually unprecedented economic slowdown.