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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.

Cases: 3213222

Reported Deaths: 37543
CountyCasesDeaths
Los Angeles107967215314
San Bernardino2660281678
Riverside2643632857
Orange2377082704
San Diego2286322375
Santa Clara985831264
Kern90564591
Fresno858081067
Sacramento841101185
Alameda70823896
Ventura66402525
San Joaquin59665835
Contra Costa55245489
Stanislaus49065796
Tulare43574542
Monterey37527259
San Mateo34294340
San Francisco30559293
Santa Barbara27149267
Solano27041115
Imperial25707510
Merced25575331
Sonoma25141251
Kings20138161
Placer17839188
San Luis Obispo16957158
Madera14000151
Santa Cruz13009135
Marin12024165
Yolo11210138
Shasta10054129
Butte9820136
El Dorado818462
Sutter806983
Napa800548
Lassen526916
San Benito522351
Yuba517630
Tehama446846
Tuolumne347740
Nevada335574
Mendocino329336
Amador306733
Lake272432
Humboldt262427
Glenn202622
Colusa18719
Calaveras170423
Siskiyou149913
Mono11454
Inyo105129
Del Norte8742
Plumas6135
Modoc3903
Mariposa3555
Trinity3065
Sierra950
Alpine730
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A Pacific storm is now moving into northern California. The clouds have arrived, the wind is getting stronger, and we can expect areas of rain and snow tonight, and it will be heavy at times. Snow will fall down to the valley floor through Wednesday morning.
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