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.
As we move into the colder months in the U.S., health experts are warning of a more active flu season than last year, sounding the alarm on what many are calling a 'twindemic.' Dr. Syra Madad, infectious disease epidemiologist, joined Cheddar's 'Search for the Cure' to discuss the intersection of the flu season with the Covid-19 pandemic.
Schools across the country could expect to see billions of dollars towards providing a more accessible Universal Pre-K program. Steven Barnett, Board of Governors Professor and Director of the National Institute for Early Education Research at Rutgers University, joined Cheddar News to discuss more.
The Fifth Circuit Court of Appeals court temporarily held up President Biden's vaccine mandate for workplaces with more than 100 employees as the various lawsuits challenging it are combined. Marjorie Mesidor, a partner at the law firm Phillips & Associates, PLLC, joined Cheddar to break down the arguments in play. "They [the Biden Administration] say we have the authority to do this under the broad powers that are given under OSHA," she said. "What the Republic side then is saying, no, this is overbroad."
The UN climate summit wrapped up over the weekend after days of negotiations over the summit's final agreement. The agreement pushes countries to reassess their climate goals by the end of next year, do more for countries facing the worst effects of climate change, and also calls for a "phase down" of coal and other fossil fuel subsidies. The White House praised the agreement, but underscored the feelings of many world leaders by saying it isn't enough.
Deborah Brosnan, climate expert and president of Deborah Brosnan and Associates, joined Cheddar's News Wrap to discuss.
President Biden is under some pressure from members of his own party over rising gas prices. Senate Majority Leader Chuck Schumer has called for the president to utilize oil reserves to lower gas prices ahead of the holiday season, as gas prices are currently at a seven-year high. Energy Workforce & Technology Council CEO Leslie Beyer joins Cheddar News' Closing Bell to discuss.
The men's brand Harry's is teaming up with Stop Soldier Suicide and Headstrong to help provide mental health support with a $500,000 financial commitment. The withdrawal of troops from Afghanistan triggered a range of mental health responses from veterans and active service members, as well as displaced refugees who are now acclimating to a new way of life. Maggie Hureau, Harry's head of social impact, joined Cheddar News to talk about the partnership and why Harry's chose to get involved in mental health care.
Inflation has risen to its highest level in 31 years, sending consumer prices on everything from groceries to gas to rent surging. For many businesses, that's good news as inflation typically means better profit margins. According to data from FactSet, nearly two out of three of the biggest U.S. publicly traded companies have reported fatter profit margins so far this year compared to the same stretch of 2019, before the pandemic. Gregory Daco, chief U.S. economist for Oxford Economics, breaks down how the top businesses are reaping the benefits of inflation, and when consumers can expect inflation to ease.
Meta, the parent company of Facebook, is facing a lawsuit from Ohio's attorney general Dave Yost, who said the company misled the public about safety on the platform.
Cases of covid-19 are climbing in the Upper Midwest, Southwest, and parts of the Northeast. The seven-day national average is sitting at roughly 82,000 new cases which is an 11 percent jump from the week before. Dr. Amesh Adalja, Infectious Disease, Specialist, Sr. Scholar at Johns Hopkins Center for Health Security joined Cheddar's Opening Bell to discuss this recent uptick ahead of the holiday season.
