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US Budget deficit hits record high

Budget Deficit, © AP/Press Association Images

The US government’s budget deficit hit 735.7 billion dollars (£533 billion) through the first four months of the budget year — an all-time high for the period — as the pandemic restricted tax revenues and Covid relief spending soared.

The Treasury Department reported on Wednesday the deficit so far for the budget year that began on October 1 was 89% higher than the 389.2 billion dollar deficit (£281.4 billion) run up in the same period a year ago.

Last year’s deficit through January had not yet been affected by the pandemic, which began hitting the US in February.

The report showed spending through the first four months of this budget year was up 22.7% to 1.92 trillion dollars (£1.39 trillion) compared to the same period last year, while government tax revenues were down 0.8% to 1.19 trillion dollars (£860 billion).

For January, the deficit totalled a record for the month of 182.8 billion dollars (£132.15 billion). One of the big spending categories last month included 139 billion dollars (£100.5 billion) for another round of individual economic relief payments authorised by the 900 billion-dollar (£650.7 billion) relief measure Congress passed in late December.

President Joe Biden is pushing for Congress to approve another 1.9 trillion-dollar relief measure that would provide a round of 1,400-dollar (£1,012) payments to eligible Americans. The December measure included individual payments of 600 dollars.

Republicans are resisting the proposal, saying it is too expensive and is coming at a time when the economy has begun to recover. Mr Biden has insisted that the bigger danger is doing too little, and Democrats have begun a process that will allow them to pass the 1.9 trillion dollar package without Republican support.

All the spending for Covid relief sent the budget deficit for the 2020 fiscal year that ended September 30 to a record 3.1 trillion dollars (£2.24 trillion). That was more than three times the 2019 budget deficit of 984.4 billion dollars.

Source:

www.breakingnews.ie

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