Monthly Deficit Hits New Record
For Immediate Release
The United States ran a record-high budget deficit in February 2020. According to the Monthly Treasury Statement released today, the February deficit totaled $235 billion. Though monthly budget numbers are not particularly informative on their own, they speak to a dangerous trend. The following is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:
It is beyond distressing that we may be entering a period of national emergency with record-high levels of borrowing. We ran higher deficits in February than any time in our nation’s history – and that was before any large effects of the coronavirus outbreak.
Instead of taking advantage of our strong economic growth to get our fiscal house in order, we let it continue to fall apart by passing unpaid for tax cuts and spending increases. That leaves us less prepared for what could be a sustained economic slowdown.
To be sure, we shouldn’t read too much into monthly numbers. February is almost always a high deficit month, as taxpayers owed big tax refunds tend to file early and collect those payments. Monthly deficits can vary based on a number of timing issues.
Over the course of the year, though, CBO recently projected that the deficit will breach $1 trillion – and it is likely to rise much higher than that in light of recent events.
Now isn’t the time for sharp deficit reduction, but near-term borrowing should be coupled with long-term deficit reduction. It’s just unfortunate that policymakers didn’t do anything to reduce the deficit when they had the chance.
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