WASHINGTON (AP) – The US government deficit in the first three months of the fiscal year was $ 572.9 billion, a record 60.7% higher than in the same period a year ago, because spending on the COVID -19 pandemic rose while revenue declined.
The Treasury Department reported on Wednesday that the deficit three months after the fiscal year was $ 216.3 billion higher than the same period in October a year ago.
The deficit reflects an 18.3% increase in spending to $ 1.38 billion, a record for the period, while revenue fell 0.4% to $ 803.37 billion. The red ink is the result of the difference between revenue collection and expenses.
For December alone, the deficit reached a record $ 143.6 billion.
The deficit for the 2020 financial year, which ended on September 30, rose to an overall high of $ 3.1 billion. Since the spring, Congress has implemented trillions of dollars plus spending measures to combat the damage inflicted on the economy due to a downturn caused by pandemics.
The recession, which led to millions of Americans losing their jobs, also meant a drop in tax revenue at a time when demand for government support programs such as unemployment benefits and food stamps was rising.
The report shows that spending in December was a record $ 489.7 billion, while revenue was $ 346.1 billion.
The spending figure did not include the $ 900 billion emergency relief package that Congress finally passed after months of wrestling, as it was only signed at the end of the month. President Donald Trump has delayed the signing of the bill, which he called a “disgrace” because it includes only $ 600 in direct payments to individuals.
Elected President Joe Biden increased direct payments by another $ 1,400. He said a higher amount would be included in another round of relief payments. He will ask Congress to approve it as soon as he takes office on January 20th.
In addition to direct payments, the Legal Aid Act expanded two special unemployment benefit programs in December to curb the pandemic’s blow. Unemployment benefits amounted to $ 80 billion between October and December, compared to $ 5 billion during the same period last fiscal year.
Congress’s budget office predicted that this year’s deficit would be $ 1.8 billion and that the deficit would remain above $ 1 billion each year in 2030. The CBO forecast for this year was made before the December aid package was passed and also does not take into account additional expenses that Congress may pass after Biden takes office.
Oxford Economics senior economist Nancy Vanden Houten predicted the deficit would reach at least $ 2.6 billion this year, an estimate that the stimulus test would increase to a total of $ 2,000.