The federal deficit for fiscal year 2020 was $3.1 trillion, triple last year’s figure, the Congressional Budget Office estimated Thursday.
The shortfall for the fiscal year, which ended on Sept. 30, was the largest since 1945, relative to the size of the economy, driven in large part by pandemic relief spending.
For the first half of the year, the deficit was only up 8% on the year. In the second half, it was eight times larger.
Washington approved the CARES Act pandemic relief package in March, and spending between April and September was nearly twice the amount as the year before.
Pandemic aid in the form of refundable tax credits and unemployment compensation contributed mightily to the increased spending in 2020.
A bright spot in the report is that interest on the public debt decreased by $46 billion, largely because interest rates did not tick up as projected.
The CBO last month reported that short-term deficit levels would hit historic highs in large part due to the federal response to the pandemic. It also projected that record-setting deficits would turn into elevated levels of debt.
The office projected that the federal response to the virus would significantly add to the federal debt in the years ahead. It projected that the debt would reach 104% of GDP in 2021 and rise to 107% in 2023, which would be the highest percentage in the nation’s history.
