The U.S. budget deficit climbed to a record $2.81 trillion in the first 10 months of the fiscal year, a record high, the Treasury Department said Wednesday.
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In July, the gap between what the government spent and what it collected hit $62.9 billion, well below the $864 billion recorded in June. That was the lowest monthly figure since the coronavirus pandemic brought the nation's economy to a grinding halt in mid-March.
Federal spending rose to more than $626 billion last month but was offset by the $563 billion the government collected in tax revenue after it extended the tax filing deadline from April 15 to July 15. That extension allowed Americans to hold onto their cash longer as they dealt with the fallout from the virus and injected about $300 billion of liquidity into the economy.
Nearly half of the outlays in July stemmed from the Paycheck Protection Program, the $670 billion rescue fund designed to keep small businesses afloat and avert mass layoffs. It accounted for about $26 billion of the government's spending.
In total, the U.S. government has spent more than $5.6 trillion so far this year.
The deficit for fiscal 2020 is projected to hit $3.7 trillion, a record, according to a projection from the Congressional Budget Office. The current record for a fiscal year deficit is $1.41 trillion, set in 2009.
The report comes amid a weeks-long stalemate between Congress and the Trump administration over another coronavirus spending package. One of the biggest points of contention is the price tag.
Negotiators are trying to bridge the gulf between a $1 trillion aid package put forward by Senate Republicans at the end of July, and the roughly $3 trillion legislation passed by House Democrats in May. The Trump administration rejected an offer by House Speaker Nancy Pelosi, D-Calif., last week to meet in the middle on a $2 trillion price tag.
So far, Congress has passed three massive stimulus packages totaling nearly $3 trillion to help American workers and businesses survive the worst downturn since the Great Depression.
Facing a deadlocked Congress, Trump has recently acted unilaterally on additional virus relief, signing four executive actions on Saturday that would postpone the collection of payroll taxes for individuals earning less than $104,000 annually through the remainder of the year, partially restore supplemental unemployment benefits at $400 per week (25% of which would come from cash-strapped state's budgets), extend student loan relief, and discourage evictions.
Combined, the four measures would add about $165 billion into the U.S. economy in the short-term and add about $10 billion to the nation's ballooning deficit, according to new projections released by the Center for a Responsible Federal Budget.