The federal budget deficit in June totaled $863 billion, the Congressional Budget Office estimated this week. That’s up from $8 billion in the same month last year and nearly matches the fiscal gap for all of fiscal year 2019, which was $984 billion.
The surging deficit is the result of the coronavirus pandemic, as federal spending more than tripled compared to June 2019 and tax revenues plunged 28%.
Outlays by the Small Business Administration (SBA) rose from $80 million to $511 billion because of the Paycheck Protection Program created to help small companies weather the pandemic and maintain payrolls. SBA spending accounted for almost half of the government’s $1.1 trillion in total outlays.
Spending on unemployment insurance jumped from $2 billion in June 2019 to $116 billion last month, with more than half of the increase stemming from the $600 increase in weekly benefits authorized by Congress in March. Those enhanced payments are set to expire this month.
Tax revenues fell as a result of declines in wages and diminished economic activity as well as the administration’s decision to delay the deadline for quarterly estimated taxes from June 15 to July 15, the CBO said.
For the first nine months of the fiscal year, the deficit totaled $2.7 trillion, CBO estimated, compared with $747 billion over the same period last year.
Total outlays have risen by 49%, while receipts have fallen by 13%. Revenues for the first six months of the year were 6% higher than the same period last year, but receipts over the last three months plunged by 40% compared to 2019, in large part as the result of the tax filing deadline being pushed back from April 15. CBO expects that much of the deferred revenue will be collected later this year or in future years.
From April through June, the deficit was an estimated $2.0 trillion, compared with $56 billion for the same period last year.