The U.S. budget deficit soared to $1.9 trillion for the first eight months of the fiscal year, as federal revenues plummeted and spending surged to help blunt the economic pain of the coronavirus pandemic.
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In May, the gap between what the government spent and what it collected hit $424 billion, more than twice what it was one year ago, the Congressional Budget Office said on Monday. The nonpartisan agency estimated that revenue in May totaled $175 billion -- down $58 billion from last year, the direct result of a decline in wages and overall economic activity.
Federal spending climbed 53 percent last month to $598 billion, largely because of the massive government response to the virus outbreak and the related economic lockdown.
"That increase stems from the economic disruption caused by the 2020 coronavirus pandemic and from the federal government’s response to it," the CBO said.
The deficit for fiscal 2020 is expected to hit $3.8 trillion, a record, according to a projection from the Committee for a Responsible Federal Budget.
The current record for a fiscal year deficit is $1.41 trillion, set in 2009.
So far, Congress has passed four massive stimulus packages totaling nearly $3 trillion to blunt the economic pain from the virus outbreak. Democrats and Republicans widely agree that another aid package is necessary, but are divided about what should be included in the legislation.
Some options currently under consideration at the White House include a payroll tax cut, liability protections for businesses reopening during the outbreak, tax deductions or write-offs for individuals who take a vacation during a defined period of time, and a back-to-work bonus for unemployed Americans returning to their jobs.