The U.S. budget deficit soared in January as Congress approved another massive coronavirus relief bill that sent direct aid to Americans still reeling from the pandemic, the Congressional Budget Office said this week.
In January, the gap between what the government spent and what it collected hit $165 billion, five times what it was one year ago, the CBO said in a report published on Monday. The nonpartisan agency estimated that revenue in January totaled $387 billion, while spending soared to $552 billion after Congress passed the $900 billion aid package.
The most expensive provision in the legislation was the $142 billion in stimulus checks the federal government delivered in January. Spending on unemployment benefits rose to $34 billion last month from $28 billion in December.
Spending on unemployment benefits, which were extended through mid-March in the latest relief bill, jumped to $34 billion last month from $28 billion in December and $3 billion in January 2020, before the crisis began. Payments on emergency rental assistance, meanwhile, cost the federal government $25 billion in January.
"The largest changes in outlays compared with last year stem from coronavirus legislation," the CBO said. "January 2021 is the first month in which there were significant budgetary effects from the additional funding provided ... for new and existing programs in response to the pandemic."
For the first four months of the 2021 fiscal year, which began in October, the federal budget deficit rose 90% to $738 billion, nearly double the $348 billion from the same time period last year.
In fiscal 2020, the deficit ballooned to a staggering $3.1 trillion, smashing the previous record of $1.41 trillion, set in 2009.
The deficit is expected to continue its astronomical rise this year, as the Biden administration pushes a nearly $2 trillion relief package, including a fresh round of $1,400 stimulus checks. Critics, including former Clinton economic adviser Larry Summers, have slammed the size of the package, but President Biden has maintained the danger is "going too small."