The U.S. budget deficit soared to a record $2.7 trillion for the first nine months of the fiscal year, as federal revenues dried up and spending surged to help offset the economic pain of the coronavirus pandemic.
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In June, the gap between what the government spent and what it collected hit $863 billion, more than 107 times what it was one year ago, the Congressional Budget Office said on Wednesday. The nonpartisan agency estimated that revenue totaled $242 billion -- down $92 billion, or 28 percent, from last year, the result of a decline in wages and overall economic activity.
Another reason for the decline in receipts was the administration's decision to extend the tax filing deadline from April 15 to July 15. That could entail a considerable increase in receipts next month.
The deficit is on track to exceed $3.8 trillion, a record-shattering number that dwarfs the previous high of $1.41 trillion set in 2009 during the global financial crisis.
"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.
Nearly half of the outlays in June stemmed from the Paycheck Protection Program, the $670 billion rescue fund designed to keep small businesses afloat and avert mass layoffs. It accounted for almost half of the government's spending -- roughly $511 billion of the $1.1 trillion spent last month.
The report comes as Congress and the Trump administration prepare to intensify negotiations on another round of virus-related aid once lawmakers return to Washington from their two-week Fourth of July break.
Some administration officials hope to limit the fourth relief package's price tag at no more than $1 trillion over concerns that they could otherwise risk losing pivotal support from fiscally conservative Senate Republicans who are starting to balk at the unprecedented debt and spending level.
"Hopefully we’ll learn from our first three bills in terms of what works and what doesn’t," Sen. John Kennedy, R-La., said Tuesday. "The undercurrent here, at least on my side of the aisle, is the fact that we owe $3 trillion and climbing. This is real debt. And that doesn’t even include the $3 trillion we added to Federal Reserve balance sheet."
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.
Measures that may be included in the next relief package include a second, more-targeted stimulus check, a back-to-work bonus, a payroll tax cut and liability protections for businesses reopening during the crisis.