CBO: Deficit Hit Record-Shattering $3.1T In 2020
The federal deficit is believed to have hit a record-shattering $3.1 trillion in 2020, according to an estimate released Thursday by the Congressional Budget Office, which The Hill noted would be “well over double the highest deficit on record.”
Official numbers from the Treasury Department are expected later this month, The Hill reported.
Even before the pandemic, the deficit was on track to exceed $1 trillion for the only time since the four-year period following the Great Recession. The fiscal response to that economic downturn led to the previous record deficit of $1.4 trillion in 2009, but that number steadily declined until the mid-2010s.
Since President Trump took office, the deficit has grown dramatically on the back of unfunded tax cuts and increased spending on both defense and domestic priorities.
But the advent of the novel coronavirus and the massive government response exploded the deficit this year, though the estimate is below the $3.3 trillion expected even a few weeks ago.
- The CBO report noted: "Relative to the size of the economy, the deficit—at an estimated 15.2 percent of gross domestic product (GDP)—was the largest since 1945, and 2020 was the fifth consecutive year in which the deficit increased as a percentage of GDP.”
- Republicans have cited the ballooning deficit in their rejection of Democrats’ $3.4 trillion coronavirus stimulus package, which would be the fifth package since the pandemic began.
- The Hill reported that “Senate Republicans have only agreed to a $600 billion bill,” though the White House “has signaled willingness to increase its $1 trillion bid to about $1.5 trillion.”