The US budget deficit rose to $ 2.81 trillion in the first 10 months of this fiscal year, breaking all records, the Treasury Department said Wednesday.
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By the end of this fiscal year on September 30, the deficit is expected to finally reach a forecast level more than double the largest annual deficit on record.
The Treasury Department’s report said the federal government budget ran a deficit of $ 63 billion in July, but this is a relatively modest amount compared to the huge numbers in the spring months when the government try to revive an economy that has been stalled due to the outbreak of the corona virus.
July’s deficit is much lower than June’s 864 billion, partly because the government took in a record tax amount of $ 563 billion, after extending the tax filing deadline. July 15. That extension gives Americans more time to weather the economic devastation caused by the pandemic.
Small Business Administration subsidy payments amounted to $ 511 billion in June when the government implemented the Workers’ Wage Protection Program. This amount dropped to about 26 billion dollars in July.
So far this budget year, the total US government revenue is $ 2.82 trillion, down just 1% from the same period last year. The Ministry of Finance noted that there is “income realignment” provided by various government aid packages. In other words, unemployment benefits and other aid are still taxable.
Expenditures for this budget year totaled $ 5.63 trillion, up to 50% from $ 3.73 trillion for the same period in 2019, with the majority of additional spending related to consolidation. the country’s economy before the pandemic.
Congress passed bailout packages totaling nearly $ 3 trillion this year, but Democrats and Republicans are still arguing over another bailout bill amid the 600 expansion of unemployment benefits. dollars per week expired on July 31.
President Donald Trump issued a series of decrees last weekend to extend the period of unemployment benefits at $ 400 a week, with 25% to be paid by states. But it is not clear how the extension will affect economic development, while funding may be exhausted after 5 weeks.
House Democrats have passed another bill with a $ 3 trillion aid, but the Republican-led Senate has made a separate bill worth nearly $ 1 trillion and has not yet attended. law goes to the House of Representatives to vote before the August holiday.
Earlier, the Congressional Budget office forecast a $ 3.7 trillion deficit for this fiscal year as the United States fell into a deep recession in February, ending a streak of record growth in nearly 11 years due to Disease. The Trump administration predicts that the economy will recover in the second half of 2020, but many other forecasters fear consumers will hold onto their money as infections rise in states like Florida. Personal consumption is the main driver of the US economy, accounting for about 70% of total economic activity.
Last month, the government reported that gross domestic product (GDP) fell a record 32.9% year-on-year, in the quarter from April to June, as the viral outbreak rebound pushed businesses had to close a second time in some areas.
For 20 consecutive weeks, more than a million Americans filed for unemployment benefits. The unemployment rate fell to 10.2% last month but was still higher than at any time during the 2008-2009 financial crisis.
It was also the time when the federal government set its record for the annual deficit, reaching 1.4 trillion dollars in 2009 as it tried to bring the country out of a recession. This record was passed in May 2020.