Treasury Reports $399 Billion Deficit in May as COVID-19 Relief Continues

For Immediate Release

The United States budget deficit for the month of May totaled $399 billion, bringing the deficit thus far for fiscal year 2020 to $1.88 trillion, according to the Monthly Treasury Statement released today. This comes as the federal government continues to distribute funds to fight the health and economic impact of the COVID-19 pandemic. Below is a statement from Maya MacGuineas, president of the Committee for a Responsible Federal Budget:

“The trajectory of this year’s deficit is no surprise, given the large fiscal response enacted by Congress to fight an unprecedented crisis. But we left ourselves with too little fiscal space entering into this crisis, already facing $1 trillion deficits before enacting any fiscal relief measures.

“To fight the pandemic and economic downturn, we may have to borrow even more in the coming months. Now, more than ever, we need to keep close tabs on the nation’s fiscal health to spend wisely and also prepare to get our fiscal house in order, so that we can respond to any future crises from a position of fiscal and economic strength.”

Key highlights from today’s report:

  • The $1.88 trillion deficit in the first eight months of the fiscal year is larger than the previous annual record of $1.41 trillion, set in 2009.
  • May’s $399 billion monthly deficit is the second highest ever recorded, eclipsed only by the prior month.
  • The high monthly deficit was driven in part by the pandemic and economic crisis and response, which resulted in a record $94 billion of outlays from the Department of Labor (driven largely by unemployment benefits), $51 billion in Economic Impact Payments, and a $58 billion (25 percent) reduction in revenue collection compared to last May.
    • The previous high for Department of Labor outlays was $46 billion in April 2020, followed by $17 billion in March 2010
    • Corporate income tax payments were slightly negative in May (-$1.8 billion), suggesting most businesses have yet to take advantage of tax cuts from the CARES Act (making business net-operating loss and interest deductions more generous)
  • About half of this month’s deficit is the result of fiscal irresponsibility and demographic and economic changes that pre-date the crisis. In May of 2019, the budget deficit was $208 billion.
  • Debt held by the public grew by almost $760 billion this month and $3 trillion this fiscal year. 
    • The difference between deficits and growth in debt can largely be explained by increased cash on hand, as well as an expansion of loan programs

Click here to view the Committee for a Responsible Federal Budget’s COVID Money Tracker tool, which monitors every significant fiscal action taken to manage this ongoing crisis.


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