A new report by the Congressional Budget Office reveals that the U.S. budget deficit for June was $863 billion—an almost unthinkable increase from June of 2019 when the deficit was $8 billion. The report also shows how the cumulative deficit for the last nine months has reached $2.74 trillion (see chart below).
The dramatic change in fiscal fortunes—reflected in the chart’s diverging lines—stems from the COVID outbreak, which has both led to a shortfall in tax revenue and a massive increase in government spending.
Total spending for the last nine months also eclipsed five trillion dollars for the first time, leading the conservative Wall Street Journal editorial board to warn young Americans, “You’ll be paying for it the rest of your lives.”
The five trillion figure is found in this table in the new CBO report, which shows how government spending, income and deficits compare to 2019:
Many regard the recent spending surge, which was driven by increased unemployment payments and initiatives like the small business Paycheck Protection Program, as necessary measures to soften the economic calamity brought on by the pandemic.
The record deficit for 2020 is expected to increase further in coming months as the U.S. struggles to reopen the economy in the face of new outbreaks, and as Congress considers introducing a new stimulus program.
The largest post-war deficits prior to the current year came in 2009 and 2010, when the U.S. incurred respective totals of $1.4 trillion and $1.3 trillion in the fallout from the Great Recession.
