The US Budget Deficit is Close to $2 Trillion
The US budget gap is approaching $2 trillion, according to the Wall Street Journal.
The pandemic has forced the federal government to increase spending. The Congressional Budget Office estimates that the federal deficit for May was $424 billion, double the May 2019 number. For the fiscal year that began in October, the deficit now sits at $1.9 trillion compared to $739 billion at the same time last year.
The Congressional Budget Office estimates that the deficit could reach $3.7 trillion by the end of the fiscal year, a considerable figure as a share of gross domestic product.
Last month, the coronavirus drove up federal spending 53 percent to $598 billion. Increased unemployment benefits, stimulus checks, and small business lending contributed to the increase.
Federal revenue decreased 25 percent from a year earlier to $175 billion. Lockdowns and the economic fallout from the coronavirus lead to a decrease in the amount of payroll and income taxes. Congress also created some tax breaks to help the economy.
This number is inflated because the government has also allowed individuals to defer their payroll taxes until July. The deferred tax-deadline also lead to refunds being paid in April instead of May, reducing the total revenue for May.
Prior to the pandemic, federal revenues were increasing.