WASHINGTON – The U.S. federal budget deficit in June surged to $864 billion from single digits a year earlier amid continued strong spending on coronavirus relief programs and a drop in individual and corporate tax receipts, the Treasury Department said on Monday.
The June deficit brought the year-to-date fiscal deficit to $2.7 trillion, far eclipsing the previous full-year record of $1.4 trillion in 2009.
Some analysts forecast a gap as high as $3.8 trillion for the fiscal year to Sept. 30.
Outlays were up 223% to $1.1 trillion, a record increase for any month. The bulk of the June's jump in outlays was $511 billion for the government's Paycheck Protection Program, set up in April and designed to keep small businesses afloat by funding loans that are forgivable if certain criteria are met.
A senior Treasury official told reporters that under U.S. government accounting rules, the funds were recorded as spent in June even though Treasury has not yet paid out for forgiveness of those loans and not all may be forgiven.
June receipts fell 28% to $241 billion, a reflection of job losses due to the coronavirus pandemic but also this year's extension of the tax filing deadline to July from April.