US, WASHINGTON (ORDO NEWS) — The US budget deficit in April increased by a record $ 738 billion, as government spending to mitigate the effects of the pandemic on the economy rose sharply and tax revenues fell.
According to the U.S. Treasury Department, treasury spending totaled $ 980 billion in April, mostly due to costs associated with COVID-19, including payments to individuals and families, government and local governments, increased unemployment benefits, and Medicare and programs from other departments of health and social services.
At the same time, tax revenues amounted to only $ 242 billion, which is 55% less than in the same period last year. Partly the reason is again in the coronavirus: a number of tax payments were postponed until July – tax benefits were also included in the economic support program.
As a result, the rapid increase in expenses and a fall in treasury income led to an increase in the deficit in the first seven months of fiscal 2020 to $ 1.48 trillion. A year ago, the figure was $ 531 billion.
“We currently forecast a $ 3.2 trillion deficit for fiscal year 2020, but there remains a significant risk of an increase in the budget deficit this year if Congress approves additional incentives or if tax deferrals are extended after September,” said Oxford Economics economist. Gregory Draco.
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