This Sept. 18, 2019, file photo shows the view of the U.S. Capitol building from the Washington Monument in Washington. The federal government incurred the biggest monthly budget deficit in history in June 2020 as spending on programs to combat the coronavirus recession exploded while millions of job losses cut into tax revenues. The Treasury Department reported Monday, July 13, 2020 that the deficit hit $864 billion last month, an amount of red ink that surpasses most annual deficits in the nation’s history and is above the previous monthly deficit record of $738 billion in April.(AP Photo/Patrick Semansky, File)
By Martin Crutsinger
The federal government incurred the biggest monthly budget deficit in history in June as spending on programs to combat the coronavirus recession exploded while millions of job losses cut into tax revenues.
The Treasury Department reported Monday that the deficit hit $864 billion last month, an amount of red ink that surpasses most annual deficits in the nation's history and is above the previous monthly deficit record of $738 billion in April. That amount was also tied to the trillions of dollars Congress has provided to cushion the impact of the widespread shutdowns that occurred in an effort to limit the spread of the viral pandemic.
For the first nine months of this budget year, which began Oct. 1, the deficit totals $2.74 trillion, also a record for that period. That puts the country well on the way to hitting the $3.7 trillion deficit for the whole year that has been forecast by the Congressional Budget Office.
That total would surpass the previous annual record of $1.4 trillion set in 2009 when the government was spending heavily to lift the country out of the recession caused by the 2008 financial crisis.
The June deficit was driven higher by spending on various government relief programs such as an extra $600 per week in expanded unemployment benefits and a Paycheck Protection Program that provided support to businesses to keep workers on their payrolls.
The report showed that the cost of the Paycheck Protection Program in June was $511 billion. That reflected a charge to the government for all the bank loans made under the program even though the government will not actually have to pay out funds until the banks determine whether the businesses met the criteria for having the loans forgiven. Those requirements include spending at least 60% of the loan amount on worker pay with the other 40% going to overhead costs such as rent and utilities.
Another reason for the surge in the June deficit was the government's decision to delay tax payments this year until July 15. That decision means that quarterly payments made by individual taxpayers and corporations will not be due until July 15 this year rather than June.
So far this budget year, revenues total $2.26 trillion, down 13.4% from the same period last year, while spending totals $5 trillion, up 49.1% from a year ago.
The CBO estimate of a $3.7 trillion deficit for this year could go higher depending on the course of the economy. The country fell into a deep recession in February, ending a record long expansion of nearly 11 years. The Trump administration is predicting that the economy will come roaring back in the second half of this year but many private forecasters are concerned that a resurgence of virus cases could make consumers too fearful to resume spending, which drives 70% of the economy.
Congress which has already approved more than $3 trillion in a series of rescue packages, is scheduled to debate another support effort when it returns from recess on June 20. Democrats are pushing for an extension of the expanded unemployment benefits which will soon run out.
After the Chicago teachers union voted to work remotely due to what they say is a lack of safety protocols amid the COVID-19 surge, the school system canceled classes on Wednesday, citing harm that remote learning has done to the city's children. Randi Weingarten, president of the American Federation of Teachers, joined Cheddar to discuss the issues surrounding the latest dispute between educators and schools. She said that the return to in-person learning would likely be halted until more COVID tests could be provided for districts. "This is a terrible situation for everybody, and we need the testing, and we need the masks," she said. "It's the omicron surge that has created this disruption, and we are trying to do the best we can. And this is the only school district that has this kind of action right now." The teachers might not be returning to their schools for at least two weeks amid the ongoing tensions.
Illinois State Senator Robert Martwick joins Cheddar News to discuss the new bill he co-sponsored allowing students in the state to take 5 mental health days without a doctor's note.
On Monday, President Biden announced his new plan to take on inflation by taking down the big meat monopolies - turning to the federal government's antitrust authorities to investigate the major meatpackers that control a significant share of the market. The White House plans to devote one billion dollars to aiding independent meat and poultry producers in an effort to undercut the few powerful meat producers that have control of the sector. Austin Frerick, deputy director of Thurman Arnold Project at Yale, joins Cheddar News to discuss.
As the pandemic drags on, so does the widespread great resignation. In November alone, 4.5 million Americans quit their jobs, marking a new record high, and showing a 9 percent jump from the month prior. On the flip side, the number of people filing tax paperwork to start new businesses is surging, with over 430,000 new businesses launching in November. Rhett Buttle, the founder of Public Private Strategies and national business advisor to the Biden for President campaign, joined Wake Up with Cheddar to discuss.
New York Attorney General Letitia James is ramping up a civil investigation into The Trump Organization. The AG's office has subpoenaed Ivanka Trump and Donald Trump Jr. They have refused to comply with the subpoenas. Bradley Moss, national security attorney, joins Cheddar News to discuss the next steps in this investigation.
Colorado Gov. Jared Polis has officially reduced the 110-year prison sentence of truck driver Rogel Aguilera-Mederos to 10 years, calling the initial lengthy sentence “unjust.” Dan Gilleon, constitutional attorney at Gilleon Law Firm APC, joined Cheddar to discuss more.
Former Brooklyn Borough President Eric Adams was sworn in as the newest Mayor of New York City. Adams is now expected to work on a number of issues such as crime and coronavirus. Erin Durkin,, reporter at PoliticoNY, joins Cheddar News to discuss more.
California's new composting law will affect what residents do in their kitchens. As of this week, Californians will have to recycle excess food in an effort to reduce emissions caused by food waste. Cities and counties will turn recycled food into compost or use it as a renewable energy source. California's new law is the largest mandatory residential food waste recycling program in the country. Rachel Wagoner, Director of the California Department of Resources, Recycling and Recovery called the law 'the biggest change to trash' since recycling started in the 1980s. She joined Cheddar Climate to discuss.
As the U.S. comes up on the first anniversary of the January 6 insurrection.,A.C. Thompson, investigative reporter at ProPublica, joined Cheddar's Baker Machado to discuss updates to American Insurrection by FRONTLINE, ProPublica and Berkeley Journalism’s Investigative Reporting Program. The documentary investigates the attack on the Capitol touched off by the lie that the presidential election was stolen from Donald Trump but with new information gleaned since the event including interviews with lawmakers and law enforcement and the evolution of groups like the Boogaloo Boys and the Proud Boys behind the attack. "In some ways those groups that were kind of the vanguard of January 6 are maybe no longer relevant because their message is everywhere," he said.
