US$2.2 trillion virus relief blows US fiscal deficit past US$3 trillionBusiness | 17 Oct 2020 10:05 pm
Efforts to combat the coronavirus pandemic left the U.S. government submerged in red ink as its fiscal year came to a close.
The final tally for the budget deficit in fiscal 2020 came to US$3.13 trillion, more than triple last year’s shortfall of US$984 billion and double the previous record of US$1.4 trillion in 2009, courtesy of a stimulus package passed that year to battle the financial crisis, CNBC reports.
Most of the damage to this year’s budget came due to the CARES Act, a US$2.2 trillion spending package that included extra unemployment compensation to workers displaced during the pandemic and forgivable loans to business as an incentive to retain workers.
Receipts for the year came to US$3.42 trillion against outlays of US$6.55 trillion, the biggest of which came during June when the government spent US$1.1 trillion, according to the Treasury Department.
The fiscal year ended with government debt at just under US$27 trillion, all but US$6 trillion of which is held by the public.
Tax collections came in at 1.61 trillion for the year, US$203 billion less than estimated in the budget. Corporate tax collections missed the budget estimate by US$51.8 billion while social insurance and retirement receipts were US$2.1 billion below.
Higher-than-expected outlays for the departments of agriculture, education and health and human services also contributed to the shortfall.
The cost to service all that debt for the year came to US$522.8 billion, which actually was the lowest total since 2017. Low government bond yields, helped in part by the Federal Reserve, helped keep debt service costs lower.