In this Aug. 3, 2020, file photo dark clouds and heavy rain sweep over the U.S. Capitol in Washington. 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. (AP Photo/J. Scott Applewhite, File)
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.
Following the invasion of Ukraine, a multitude of Western companies have paused doing business with Russia. PepsiCo, Coca-Cola, McDonald's, and Starbucks are the most recent companies to temporarily cease operations in Russia. Dean of Miami Herbert Business School at the University of Miami, John Quelch, joined Cheddar News to discuss what message this sends to Russia and the Russian consumer. “I would not underestimate the collective strength of all of these multinational companies, essentially coming together to make their collective statement in support of the political statements that have come out of Washington," he said.
The war in Ukraine continues to reveal heartbreaking gut-wrenching stories. The war in itself is not only devastating but also expensive. Experts estimate that Russia is draining nearly $20 million dollars each day to continue occupying and invading Ukraine. All this could force the country to turn to cryptocurrencies. It's a major turn for the country that briefly considered outlined digital assets entirely, but it could also have serious implications for cryptos. Managing Director at Quantum Fintech Group, Harry Yeh, joined Cheddar to discuss more.
President Biden announced a ban on Russian oil and natural gas imports to the U.S. in response to its invasion of Ukraine, a move he warned could lead to an even greater surge in gas prices. The ban is prompting a conversation about the current oil production levels in the U.S. and whether or not the industry can ramp up production to soften the blow to American families at the gas pump. Clark Williams-Derry, Energy Finance Analyst with the Institute for Energy Economics and Financial Analysis, breaks down the state of the U.S. oil industry and how the ban might impact production levels here at home.
PepsiCo, Coca-Cola, McDonald’s, and Starbucks are the latest American food brands to have halted business operations in Russia after having faced scrutiny and criticism for originally failing to do so amid the country's invasion of Ukraine.
As Russia intensifies its war on Ukraine, President Biden announced a ban on oil imported from the aggressor nation. Critics of Russia have said this would be the best way to force Putin to pull back, but curbs on Russian oil exports are expected to send already skyrocketing oil and gas prices even higher, further impacting consumers, businesses, financial markets, and the global economy. Leslie Beyer, CEO of the Energy Workforce and Technology Council, joined Cheddar News' Closing Bell to discuss. "It's certainly going to increase pricing, but it is the right thing to do," she said. "The industry itself has already pulled out of the significant portion of its operations in Russia."
Sports Betting in the U.S. is booming. According to industry experts, we could see another boom this year as more states move towards statewide legalization of sports wagering. While this comes as huge news for fans, there are some very real concerns as to whether or not sports betting potentially poses a threat to public health. Senior Clinician at the Caron Treatment Centers, Eric Webber, joined Cheddar to discuss more.
The Biden administration has made gender policy a core part of how it governs. The president established the first Gender Policy Council. It's on the same level as the National Security Council, Domestic Policy Council and National Economic Council, putting the interests of women and other underserved groups at the table for the most important policy discussions.
Cheddar News sat down with Jennifer Klein, executive director and co-chair of the White House Gender Policy Council, to discuss the council's work and its significance during Women's History Month.
State Representative Jessica González, Vice Chair of the Texas House LGBTQ Caucus, joins Cheddar News to discuss the latest Texas anti-transgender directive.
The United States Secretary of Agriculture, Tom Vilsack joins None of the Above to discuss the newly emerging conflict in Europe, what it means for agriculture in the states, dairy and meat consumption, and how the department is planning to promote climate-smart agriculture.
