The United States on Tuesday reported a record US$738 billion budget deficit in April, as an explosion in government spending and a shrinking of revenues amid the novel coronavirus pandemic put it deep into the red.
The Treasury Department said the budget deficit last month was the first to reflect the enormity of government spending that has been authorized to try to mitigate the economic impact of the crisis, which until recently saw most of the country under strict lockdown orders and many businesses shuttered to contain the spread of the virus.
The U.S. Congress approved a US$2.3 trillion rescue package on March 27 and has since added to it, taking total emergency relief spending to around US$3 trillion. April marked the first month some of those stimulus programs were begun to be paid.
April is usually a month in which Treasury posts a surplus because tax payments are due on April 15, but they have been delayed this year until July 15 due to the pandemic. The government has only reported an April deficit 15 times over the past 66 years, Treasury said.
More than 33 million Americans have filed for unemployment benefits since March 21, which equates to roughly one in five jobs, limiting the U.S. government's revenue base.
They really are striking numbers that I didn't think I would ever see, a senior U.S. Treasury official told reporters when asked about the monthly figure, which was also an all-time record budget deficit for any month.
About US$283 billion in non-withheld individual income taxes were paid in April 2019, according to Treasury data, and receipts for taxes withheld from worker paychecks, which totaled US$114 billion in April 2019, were reduced this year by the jump in unemployment.
In April, receipts totaled US$242 billion, down 55per cent from a year earlier, while outlays surged 161per cent to US$980 billion. The fiscal year-to-date deficit surged to US$1.48 trillion compared to a US$531 billion deficit in the comparable period in 2019.