- The US budget deficit swelled to a new record in February even as the economy continued to grow at a steady pace.
- The gap between what the government spent and collected rose to $235 billion, the Treasury Department said in its monthly budget statement Wednesday.
- Emergency spending on efforts to combat the coronavirus is expected to exacerbate the deficit.
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The US budget deficit swelled to a new record in February even as the economy continued to grow at a steady pace.
The gap between what the government spent and collected rose to $235 billion, the Treasury Department said in its monthly budget statement Wednesday. That was the largest monthly amount ever recorded and compared with $234 billion at the same time a year ago.
A national deficit tends to fall during periods of economic growth, but it has risen steadily in the US in recent years. A wave of emergency spending on efforts to combat the coronavirus is expected to exacerbate the deficit, which is already forecast to surpass $1 trillion this year for the first time since 2012.
“We’re potentially on the verge of an economic emergency, and the federal government should work to keep our economy strong and our citizens safe,” said Maya MacGuineas, the president of the Committee for a Responsible Federal Budget. “It is precisely moments like this that illustrate why it is so important to improve our nation’s fiscal situation during periods of economic expansion.”
A historically low unemployment rate has recently helped lift tax receipts, which have fallen sharply following the implementation of a Republican-led overhaul passed in 2017. Spending has continued to rise under a bipartisan budget package that was expected to add at least $500 billion to the deficit over a decade.
Unadjusted receipts last month rose 12% to $188 billion in February, while unadjusted outlays were up 5% to $423 billion.
According to the nonpartisan Congressional Budget Office, the deficit is projected to reach an unprecedented $31 trillion by 2030.
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