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US budget deficit hits all-time high of $864 billion in June

The federal government incurred the biggest monthly budget deficit in history in June as spending on programs to combat the coronavirus recession exploded while millions of job losses cut into tax revenues.

Posted: Jul 13, 2020 11:41 AM

WASHINGTON (AP) — The federal government incurred the biggest monthly budget deficit in history in June as spending on programs to combat the coronavirus recession exploded while millions of job losses cut into tax revenues.

The Treasury Department reported Monday that the deficit hit $864 billion last month, an amount of red ink that surpasses most annual deficits in the nation’s history and is above the previous monthly deficit record of $738 billion in April. That amount was also tied to the trillions of dollars Congress has provided to cushion the impact of the widespread shutdowns that occurred in an effort to limit the spread of the viral pandemic.

For the first nine months of this budget year, which began Oct. 1, the deficit totals $2.74 trillion, also a record for that period. That puts the country well on the way to hitting the $3.7 trillion deficit for the whole year that has been forecast by the Congressional Budget Office.

That total would surpass the previous annual record of $1.4 trillion set in 2009 when the government was spending heavily to lift the country out of the recession caused by the 2008 financial crisis.

The June deficit was driven higher by spending on various government relief programs such as an extra $600 per week in expanded unemployment benefits and a Paycheck Protection Program that provided support to businesses to keep workers on their payrolls.

The report showed that the cost of the Paycheck Protection Program in June was $511 billion. That reflected a charge to the government for all the bank loans made under the program even though the government will not actually have to pay out funds until the banks determine whether the businesses met the criteria for having the loans forgiven. Those requirements include spending at least 60% of the loan amount on worker pay with the other 40% going to overhead costs such as rent and utilities.

Another reason for the surge in the June deficit was the government’s decision to delay tax payments this year until July 15. That decision mean that quarterly payments made by individual taxpayers and corporations will not be due until July 15 this year rather than June.

So far this budget year, revenues total $2.26 trillion, down 13.4% from the same period last year, while spending totals $5 trillion, up 49.1% from a year ago.

The CBO estimate of a $3.7 trillion deficit for this year could go higher depending on the course of the economy. The country fell into a deep recession in February, ending a record long expansion of nearly 11 years. The Trump administration is predicting that the economy will come roaring back in second half of this year but many private forecasters are concerned that a resurgence of virus cases could make consumers too fearful to resume spending, which drives 70% of the economy.

Congress which has already approved more than $3 trillion in a series of rescue packages, is scheduled to debate another support effort when it returns from recess on June 20. Democrats are pushing for an extension of the expanded unemployment benefits which will soon run out.

California Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 793065

Reported Deaths: 15189
CountyConfirmedDeaths
Los Angeles2621336401
Riverside574821172
San Bernardino52873908
Orange523821150
San Diego45147765
Kern31572354
Fresno27843362
Sacramento21628383
Alameda20748390
Santa Clara20587299
San Joaquin20019421
Stanislaus16398339
Contra Costa16056201
Tulare15687256
Ventura12477146
Imperial11606314
San Francisco1086599
San Mateo9625144
Monterey956869
Santa Barbara8930110
Merced8820137
Kings753477
Sonoma7160120
Marin6613113
Solano619457
Madera442465
Placer350742
San Luis Obispo343827
Butte276940
Yolo276554
Santa Cruz22768
Sutter167910
Napa164113
San Benito131211
Yuba11307
El Dorado10744
Mendocino87518
Lassen7350
Shasta72414
Glenn5633
Nevada5246
Colusa5196
Tehama5134
Lake51211
Humboldt4896
Calaveras31114
Amador28616
Tuolumne2264
Inyo18714
Mono1652
Siskiyou1630
Del Norte1381
Mariposa752
Plumas500
Modoc250
Trinity150
Sierra60
Alpine20
Unassigned00
Chico
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Oroville
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Paradise
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Chester
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Red Bluff
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Willows
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Mild temperatures, breezy south winds, and improved air quality are ahead for your Wednesday. Coastal showers will be possible on Thursday, and then hot temperatures and high fire danger return for your weekend.
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