US Government Sees a new $737.9 trillion monthly deficit

In April, the federal government racked up a massive deficit, usually a month of significant budget surpluses. The Treasury Department said Tuesday last month the government ran up a $737.9 billion deficit. That was more than three times the previous record $235 billion monthly deficit set in February. The deficit so far climbed to $1.48 trillion for the fiscal year which began Oct. 1.

Nancy Vanden Houten, the leading US financial economist for Oxford Economics, estimates that the deficit could reach $3.2 trillion or higher for the entire fiscal year, depending on whether Congress passes further relief packages. House Speaker Nancy Pelosi introduced a $3 trillion bill on Tuesday, allocating almost $1 trillion for states and cities. In the Senate the proposal faces uncertain prospects.

Treasury usually runs surpluses in April because of the annual April filing deadline for tax payments, as government revenues swell. But this year, the April 15 tax deadline has been deferred to July 15 among the many measures that the government has taken to try to cushion the coronavirus shutdowns blow.

The Congressional Budget Office has estimated all of the government's spending on dealing with what is expected to be a sharp recession will push the deficit to $3.7 trillion for the whole year. That would break the previous high of $1.4 trillion set in 2009, the first of four years in which annual deficits soared past $1 trillion as the government fought out of the Great Recession to pull the nation off.

Revenues totaled $1.85 trillion for the first seven months of the fiscal year, a drop of 9.7 per cent from the same timeframe a year earlier. Government spending amounts to $3.33 trillion, a 29.3 per cent rise from a year earlier. The $1.48 trillion deficit for the first seven months of this budget year is 79 per cent higher than the $530.9 billion deficit reported in the last budget year's first seven months.