US deficit soars to record

15 July, 2020 12:00 AM printer

WASHINGTON: Massive government rescue payments to help businesses and households survive the economic hit from the coronavirus drove a record surge in the US deficit last month, the Treasury Department said.

"Driven by the impact of the COVID-19 outbreak and government response, the deficit for June 2020 was $864 billion, compared to $8 billion in June 2019," Treasury said in its monthly report statement, reports AFP.

That was well past the previous record of $234 billion set in February 2009 at the start of the global financial crisis.

With outlays in June surging to $1.1 trillion and receipts falling, the funding gap in the first nine months of the current fiscal year soared 267 percent compared to a year earlier, hitting $2.74 trillion, Treasury said.

"More than half of this increase was due to a $511 billion increase in Small Business Administration budget outlays, primarily for the Paycheck Protection Program (PPP)."

The payments were part of the unprecedented $2.2 trillion CARES Act, which provided aid for businesses of all sizes as well as direct payment to US taxpayers and expanded unemployment benefits.