WASHINGTON (AP) – The deficit of the United States government in the first three months of the budget year was a record $ 572.9 billion, 60.7% higher than in the same period last year, as spending to deal with the COVID-19 pandemic increased while revenues declined.
The Treasury Department said on Wednesday that, three months after the start of the budget year, the deficit was $ 216.3 billion greater than the same period from October to December of the previous year.
The deficit reflects an 18.3% jump in expenses, to $ 1.38 trillion, a record for the period, while revenue fell 0.4% to $ 803.37 billion. The red ink results from the difference between revenue collection and expenses.
In December alone, the deficit reached a record US $ 143.6 billion.
The deficit for the 2020 budget year, which ended on September 30, peaked at $ 3.1 trillion. Beginning in the spring, Congress passed spending measures worth more than $ 1 trillion to combat damage to the economy from a pandemic-induced slowdown.
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 insurance and food stamps, increased.
The report showed that spending in December was a record $ 489.7 billion, while revenues were $ 346.1 billion.
The spending amount did not include the $ 900 billion aid package that Congress finally approved after months of disputes because it was not signed into law until the end of the month. President Donald Trump delayed signing the bill, which he called “disgrace” because it included only $ 600 in direct payments to individuals.
President-elect Joe Biden endorsed the increase in direct payments by another $ 1,400. He said a higher amount will be included in another round of relief payments that he will ask Congress to approve once he takes office on January 20.
In addition to direct payments, the December relief bill extended two special unemployment insurance programs to cushion the pandemic blow. Unemployment benefits totaled US $ 80 billion from October to December, compared to US $ 5 billion in the same period of the last budget year.
The Congressional Budget Office has forecast that this year’s deficit will total $ 1.8 trillion and remain above $ 1 trillion each year until 2030. The CBO forecast for this year was made before the approval of the December and also does not take into account any extra expenses that Congress may approve after Biden’s inauguration.
Nancy Vanden Houten, a senior economist at Oxford Economics, predicted that this year’s deficit will reach at least $ 2.6 trillion, an estimate that assumes stimulus checks will be increased to a total of $ 2,000.