By Martin Crutsinger
The U.S. government's budget deficit surged to an all-time high of $1.7 trillion for the first six months of this budget year, nearly double the previous record, as another round of economic-support checks added billions of dollars to spending last month.
In its monthly budget report, the Treasury Department said Monday that the deficit for the first half of the budget year — from October through March — was up from a shortfall of $743.5 billion in the same period a year ago.
The deficit has been driven higher by trillions of dollars in support Congress has passed in successive economic rescue packages since the pandemic struck in early March 2020. The latest round came in a $1.9 trillion measure that President Joe Biden pushed through Congress last month.
Biden's package included individual support payments of up to $1,400 and the administration rushed to make those payments as soon as the president signed the measure into law. The Treasury Department statement showed that the payments in March totaled $339 billion.
The budget report showed that the deficit for just March totaled $659.6 billion, the third-highest monthly deficit. For the six-month period, the $1.7 trillion deficit total surpassed the previous record of an $829 billion deficit run-up for the six months ending in March 2011. That was a period when the government was spending to deal with the economic damage from the recession caused by the 2008 financial crisis.
Last year's deficit, for the budget year that ended Sept. 30, totaled a record $3.1 trillion. The Congressional Budget Office estimated in February that this fiscal year's deficit would total $2.3 trillion. But that estimate did not include the cost of Biden's $1.9 trillion rescue plan that Congress passed in March or the impact of the administration's “Build Back Better” infrastructure proposal that Congress is considering now.
Nancy Vanden Houten, senior economist at Oxford Economics, said she expects the deficit for this budget year will total $3.3 trillion, an all-time high but up just 6.5% from last year's record shortfall of $3.1 trillion.
Analysts said the deficit's surge in the first six months of the fiscal year reflected that the first half of the 2020 budget year was mostly unaffected by the pandemic. The loss of revenue from millions of jobs lost and the big-spending measures Congress passed to deal with the pandemic-triggered recession occurred in the second half of the 2020 budget year.
Vanden Houten said that, while she expects Congress will pass some version of Biden's $2 trillion infrastructure bill, the budget impact will not occur until the start of the next fiscal year.
For the first six months of the current budget year, Treasury said revenues totaled $1.7 trillion, a drop of 5.5% from the same period last year. Spending was $3.4 trillion, up 45.3%.
Biden's rescue program passed without Republican support, unlike the previous packages passed during the Trump administration, which were backed by both Republican and Democratic lawmakers.
Republicans contend that new spending is not needed in light of rising deficits and increased signs that the economy is starting to rebound.
The Treasury report Monday showed that through the first six months of the current budget year, interest payments on the debt total $229 billion, $41 billion below the same period a year ago. That reflects lower interest rates on the rising level of debt.
The Trump administration has asked an appeals court to remove Lisa Cook from the Federal Reserve’s board of governors by Monday, before the central bank’s next vote on interest rates. Trump sought to fire Cook Aug. 25, but a federal judge ruled late Tuesday that the removal was illegal and reinstated her to the Fed’s board.
President Donald Trump's administration is appealing a ruling blocking him from immediately firing Federal Reserve Gov. Lisa Cook as he seeks more control over the traditionally independent board. The notice of appeal was filed Wednesday, hours after U.S. District Judge Jia Cobb handed down the ruling. The White House insists the Republican president had the right to fire Cook over mortgage fraud allegations involving properties in Michigan and Georgia from before she joined the Fed. Cook's lawsuit denies the allegations and says the firing was unlawful. The case could soon reach the Supreme Court, which has allowed Trump to fire members of other independent agencies but suggested that power has limitations at the Fed.
Chief Justice John Roberts has let President Donald Trump remove a member of the Federal Trade Commission, the latest in a string of high-profile firings allowed for now by the Supreme Court.
President Donald Trump has fired one of two Democratic members of the U.S. Surface Transportation Board to break a 2-2 tie ahead of the board considering the largest railroad merger ever proposed.
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President Donald Trump's administration last month awarded a $1.2 billion contract to build and operate what's expected to become the nation’s largest immigration detention complex to a tiny Virginia firm with no experience running correction facilities.
Cracker Barrel said late Tuesday it’s returning to its old logo after critics — including President Donald Trump — protested the company’s plan to modernize.
Donald Trump has a message for critics who think turning the U.S. government into a major stockholder of Intel is a “socialist” move: More is coming.
Federal Reserve Gov. Lisa Cook's lawyer says she'll sue President Donald Trump's administration to try to prevent him from firing her. Longtime Washington attorney Abbe Lowell said Tuesday that Trump “has no authority to remove” Cook. If Trump succeeds in removing Cook from the Fed's board of governors, it could erode the Fed’s political independence, which is considered critical to its ability to fight inflation because it enables the Fed to take unpopular steps like raising interest rates. The Republican president said Monday he was removing Cook because of allegations she committed mortgage fraud. Cook was appointed by Democratic President Joe Biden in 2022 and says she won't step down.
Federal Reserve governor Lisa Cook late Wednesday said she wouldn’t leave her post after Trump on social media called on her to resign over an accusation from one his officials that she committed mortgage fraud.
