CBO Reports $198 Billion Deficit for August, Pushing FY 2020 Total to $3 Trillion
For Immediate Release
The United States' budget deficit for the month of August was $198 billion, according to the Congressional Budget Office. The total budget deficit for the first 11 months of fiscal year 2020 now stands at $3 trillion, as the federal government continues to disburse fiscal aid related to the COVID-19 pandemic and resulting recession. Below is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:
These numbers are huge. While the response sure as heck shouldn’t be to cut off recovery funds too early, it should be to deal with the debt once the economy is strong again.
Politicians like to pretend the borrowing is the hard part. It is indeed necessary, but the struggle is with policy choices for bringing the debt down later. The key to addressing all of this — the pandemic, the recession, and the massive debt — is for our politicians to put aside their differences and truly work together. We need to borrow to get through this crisis, and we will need to borrow again in the future when we will undoubtedly also face terrible challenges. The key is to fix our balance sheet when each crisis abates, so as a country we remain strong and resilient.
Key highlights from today’s report:
- Spending thus far in 2020 has totaled $6 trillion, 46 percent higher than last year at this time. Half of the $6 trillion has been borrowed.
- CBO confirms that the deficit for the full year will be $3.3 trillion. Before this year, the highest annual deficit was $1.4 trillion in 2009. As a share of the economy, the FY 2020 deficit will be 16% of GDP, the largest since 1945.
- $53 billion was spent on unemployment benefits in August, down from $110 billion spent in July. The last week of increased unemployment benefits was in late July, but some states may have made the last payments in August. Some federally funded unemployment expansions, such as Pandemic Unemployment Assistance, continue through 2020.
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