U.S. federal deficit soars to record $3.1 trillion in 2020
The U.S. budget deficit hit a record $3.1 trillion in the 2020 fiscal year, according to data released Friday by the Treasury Department.
Why it matters: The deficit — which measures the gap between what the government spends and what it brings in through taxes and other revenue streams — illustrates the massive impact the coronavirus pandemic has had on the economy.
- The shortfall easily eclipsed the previous record set in 2009, when the deficit was $1.4 trillion, per CNBC.
By the numbers:
- The federal government spent $6.552 trillion for the fiscal year ending on Sept. 30, according government data. That's up from $4.447 trillion spent last fiscal year.
- The government brought in $3.42 trillion in tax revenue in the 2020 fiscal year, down slightly from 2019.
- Much of the 2020 deficit can be attributed to the $2.2 trillion CARES Act, passed in March.
What they're saying: In a statement on Friday, Treasury said the deficit was $2 trillion more than originally forecast due to actions taken to stem the economic impact of the coronavirus.
- “Thanks to President Trump’s pro-growth policies and the bipartisan CARES Act, we are experiencing a strong economic recovery,” Treasury Secretary Steven Mnuchin said Friday.
- “The Administration remains fully committed to supporting American workers, families, and businesses and to ensuring that our robust economic rebound continues,” Mnuchin said.
The big picture: The data come as House Speaker Nancy Pelosi and the White House remain deadlocked in negotiations on a new round of stimulus aid.
- Senate Majority Leader Mitch McConnell (R-Ky.) on Thursday said he would not put a potential $1.8 trillion deal struck by democrats and the Trump administration on the Senate floor, noting the number is “a much larger amount than I can sell to my members."
Go deeper: Employment gains are reversing course