October 16, 2020 | 15:12
U.S. Federal Budget (Sep. 2020) — "A Trillion Here, A Trillion There..."
The U.S. Treasury reported a $125 billion deficit in September, capping a record blow-out for the fiscal year just ended. The $3.13 trillion in fiscal 2020 was more than three times larger than in the previous year, and more than twice as large as in 2009. While net receipts of $3.42 trillion were down just 1%, that was only because of a strong first half of the year, i.e., pre-COVID. The real devastation was on the outlays side of the ledger, which ballooned 47% to $6.55 trillion. Spending was even running higher before the pandemic struck due to increased funding for mandatory programs and defense. But it skyrocketed after March on emergency funding for small businesses (largely forgivable loans), enhanced unemployment compensation, tax rebates for households, and support for state and local governments and the health care system.
As a percentage of GDP, the budget deficit for fiscal 2020 weighs in just north of 15%, the largest since 1945. It was the fifth straight year that the ratio has climbed.
While the deficit was almost $200 billion short of the Congressional Budget Office's recent projection, the agency projects still-large shortfalls of $1.8 trillion in fiscal 2021 and $1.3 trillion in 2022 (about 6% of GDP), and that's under current laws. If another fiscal relief bill is passed, the deficit for next year could easily be one or two trillion dollars higher. But who's counting?