May 4, 2020 - Politics & Policy

Treasury to borrow record $2.99 trillion in second quarter

Treasury Secretary Steven Mnuchin. Photo: Mark Makela/Getty Images

The U.S. Treasury will need to borrow a record $2.99 trillion this quarter to pay for coronavirus relief efforts, it announced Monday.

Why it matters: The borrowing is a result of nearly $3 trillion in spending that Congress has enacted since the start of the pandemic. That outlay included direct payments to most U.S. households, the Paycheck Protection Program and other economic relief. It also reflects a dip in revenues because the government delayed the tax filing deadline to June.

  • The $2.99 trillion is more than double the $1.28 trillion the U.S. borrowed in all of 2019. Treasury had originally planned to pay off $56 billion in debt during the quarter.
  • Treasury also projected that it would need to borrow another $677 billion next quarter.

Our thought bubble via Axios' Felix Salmon: This quarter's borrowing requirements amount to 81% of the projected $3.7 trillion annual deficit for fiscal 2020 as a whole. It's a predictable consequence of pushing the tax filing deadline — and therefore millions of substantial revenues — back three months from April 15. 

Of note: The report comes as the Congressional Budget Office forecast a sharp increase in the national debt to 101% of GDP by the end of the fiscal year. The CBO also projected that the economy will shrink by an annual rate of 40% during the current quarter.

Go deeper

Cities' budget woes worsen with increased social unrest

Illustration: Sarah Grillo/Axios

Cities were already furloughing workers and considering cutting back essential services — including public safety — because of the dramatic drops in the local tax revenue that funds them. Now they're also dealing with turmoil in their streets.

Why it matters: "Unfortunately, the increasing levels of social unrest across the country reallocated efforts and scarce resources away from the former focus of getting state, regional and local economies back to some semblance of normalcy," per Tom Kozlik, head of municipal strategy and credit at HilltopSecurities.

As techlash heats up again, here's who's stoking the fire

Illustration: Aïda Amer/Axios

As controversies around online speech rage against a backdrop of racial tension, presidential provocation and a pandemic, a handful of companies, lawmakers and advocacy groups have continued to promote a backlash against Big Tech.

The big picture: Companies like Facebook and Google got a reputational boost at the start of the coronavirus lockdown, but that respite from criticism proved brief. They're now once again walking a minefield of regulatory investigations, public criticism and legislative threats over antitrust concerns, content moderation and privacy concerns.

Cities are retooling public transit to lure riders back

Illustration: Sarah Grillo/Axios

After being told for months to stay away from others, the idea of being shoulder to shoulder again in a bus or subway terrifies many people, requiring sweeping changes to public transit systems for the COVID-19 era.

Why it matters: Cities can't come close to resuming normal economic activity until large numbers of people feel comfortable using public transportation.