Federal Deficit Balloons To $2.8 Trillion, With More Coronavirus Aid Still In Limbo

For the current federal fiscal year, which began in October, total receipts were $2.824 trillion while outlays were $5.631 trillion, including more than $1 trillion in spending in June alone, the Treasury Department said, as the government has spent heavily to keep everything from airlines to small businesses to the unemployed afloat.

For the fiscal year through July, the largest single line item in expenditures was $1.106 trillion for “Income Security,” a category that grew from $294 billion in the fiscal year through March, and through July was greater than the $912 billion spent on Social Security and the $690 billion spent on Medicare, according to the monthly report; with at least part of the growth due to stimulus spending.

Negotiations between congressional Republicans, Democrats and the White House fell apart Friday, in part because of a gulf between their desired levels of spending on economic stimulus measures, with Democrats, who want help for struggling cities and states and extend a federal top-up to unemployment benefits, proposing a $3 trillion aid package, while Senate Republicans have a more modest $1 trillion plan in mind and have deep objections to any substantial federal aid for states and localities.

There was one bright note for the month of July: receipts totaled a monthly record of $563 billion after individual and business taxes were deferred to July, in deference to the coronavirus, with Treasury noting that July has been a deficit month 64 times out of the past 66 fiscal years (since fiscal year 1955), because there are typically no major corporate or individual tax due dates in this month.