The U.S. government’s budget deficit for April rose to a record $737.9 billion, the Treasury Department said Tuesday, as spending surged and tax receipts plunged due to the coronavirus pandemic and economic shutdown.
As we noted here last week, the federal budget typically runs a surplus in April as tax payments come in mid-month. Last April, the government recorded a surplus of $160.3 billion. But with the tax filing deadline pushed to July 15 this year — and with the devastation in the labor market resulting in tax withholdings from employee paychecks also falling — total tax receipts fell nearly 55%, to $241.9 billion. Withheld individual income taxes fell by more than 30% compared with April 2019, from $113.9 billion to $79.6 billion.
Spending, meanwhile, jumped by more than 250% to $979.7 billion, driven by coronavirus relief efforts, including $217 billion in Economic Impact Payments to individuals and families.
For the first seven months of fiscal year 2020, the budget deficit was nearly $1.5 trillion, up from $530.9 billion for the same period last year. The Congressional Budget Office has estimated that the deficit for the full year will total $3.7 trillion, or about 18% of gross domestic product, with federal debt held by the public rising to 101% of GDP by the end of September.