WASHINGTON (AP) – US government deficit in first three months of budget year hit $ 572.9 billion, 60.7% higher than last year, as spending to cope The COVID-19 pandemic increased while revenue declined.
The Treasury Department reported Wednesday that three months into the budget year, the deficit was $ 216.3 billion higher than in October-December last year.
The deficit reflects an 18.3% increase in spending to $ 1.38 trillion, a record for that period, while revenue fell 0.4% to $ 803.37 billion. Red ink results from the difference between revenue and expenditure collections.
In December alone, the deficit totaled a record $ 143.6 billion.
The deficit for the 2020 budget year, which ended on September 30, rose to an all-time high of $ 3.1 trillion. Since the spring, Congress has adopted billions of dollars in spending to combat the economic damage caused by a pandemic-induced recession.
The recession, which saw millions of Americans lose their jobs, also meant a drop in tax revenues at a time when demand for government support programs, such as unemployment benefits and food stamps.
The report said December spending was a record $ 489.7 billion, while revenue was $ 346.1 billion.
The spending figure did not include the $ 900 billion aid package that Congress eventually adopted after months of fighting because it was not signed into law by the end of the month. President Donald Trump has delayed signing the bill, which he called a “shame,” because it includes only $ 600 in direct payments to individuals.
President-elect Joe Biden approved an increase in direct payments by another $ 1,400. He said a larger amount will be included in another round of exemption payments he will ask Congress to approve once he takes office on Jan. 20.
In addition to direct payments, the December bill expanded two special unemployment benefit programs aimed at cushioning the pandemic. Unemployment benefits totaled $ 80 billion from October to December, up from $ 5 billion in the same period last fiscal year.
The Congressional Budget Office has forecast that this year’s deficit will total $ 1.8 trillion, and the deficit will remain over $ 1 trillion each year until 2030. The OBC forecast for this year was made before the package was adopted aid in December and also does not consider additional expenses that Congress may pass after Biden takes office.
Nancy Vanden Houten, a senior economist at Oxford Economics, predicts that this year’s deficit will reach at least $ 2.6 trillion, an estimate that assumes stimulus controls will be increased to a total of $ 2,000.