The U.S. budget deficit rose 218 percent to a record $ 3.1 trillion in the fiscal year ending Sept. 30 due to a massive increase in spending to help the economy resist the coronavirus pandemic, the government announced Friday.
That was more than double the previous record $ 1.4 trillion deficit hit in 2009 during the global financial crisis.
As spending rose and tax revenues fell due to the extensive shutdowns of the business, the Treasury Department said total US government debt rose to $ 26.9 trillion – larger than the size of the economy, which fell in the second quarter to less than $ 20 trillion .
The budget gap under President Donald Trump had already been widening ahead of the pandemic, hitting $ 1 trillion this year for the first time since 2012 following the massive tax cut in late 2017.
Administration officials tried to put a positive role in the numbers, crediting Trump by acting quickly to deploy resources to ease the economic damage to U.S. businesses and families.
“Under President Trump’s leadership, the economy has begun an incredible comeback,” Finance Minister Steven Mnuchin and White House Chief of Staff Russell Vought said in a joint statement.
“The administration remains fully committed to supporting American workers, families and businesses and to ensuring that our robust economic rebound continues,” Mnuchin added.
Trump’s team for weeks has been locked in talks with Democratic leaders in Congress over a new $ 3 trillion follow-up rescue package deployed in the early days of the pandemic, including the $ 2.2 trillion CARES Act.
Officials now acknowledge that it will be difficult to reach an agreement before the November 3 presidential election or to get the funds out, even if they manage to agree.
( Jowharwith AFP)