The federal deficit so far this fiscal year is at $2.8 trillion, roughly $2 trillion higher than the deficit for the same period last year, according to the Congressional Budget Office.
To put the figure in context, during the 2007-09 Great Recession, the highest deficit figure was $1.5 trillion, according to the White House.
The CBO, Congress’s official bookkeeper, projected in January, before the pandemic hit the United States, that the deficit for 2020 would be just over $1 trillion. It will now likely be triple that amount as lawmakers debate another coronavirus relief package that could cost anywhere between $1 trillion and $3 trillion.
Congressional fiscal years begin in October and end in September. At this point last year, the federal deficit was $900 billion. The main reasons for the additional red ink in 2020 are the government’s response to the coronavirus pandemic and historic job losses that have reduced revenue receipts.
Revenue collections and outlays in fiscal year 2020 can be divided into two periods: before and after the start of the economic disruption caused by the pandemic. For that later period, from April through July, the deficit this year was an estimated $2.1 trillion, compared with $176 billion during the same period last year, according to the CBO.
Regarding revenue specifically, receipts totaled $2.8 trillion during the first 10 months of fiscal year 2020, the CBO estimated, which is $37 billion less than during the same period last year. However, through March, before the pandemic devastated the economy, receipts were running 6% above last year’s total. From April through July, they were 10% below last year’s amounts.
The reduction in revenue has so far been met with skyrocketing spending in 2020.
Outlays for the first 10 months of fiscal year 2020 were $5.6 trillion, which is $1.9 trillion more than they were during the same period last year, the CBO reported. This increase primarily occurred between April and July as legislative efforts were enacted to combat the spread of the coronavirus.
The CBO report comes as talks have stalled between Congress and the White House on extending several provisions aimed at combating the pandemic’s effect on the economy.
With talks stalled, President Trump on Saturday signed multiple executive measures after Congress failed to pass another coronavirus relief bill.
The president signed a combination of an executive order and memorandums that aim to send financial relief to unemployed workers, protect people from evictions, offer student loan relief, and defer payroll tax payments.
These measures will add to the already mounting federal deficit.
