US Budget Deficit Hits All-Time High of $864 Billion in June 

Coronavirus spending is taking a huge toll on the federal government's finances.

Washington ran its largest monthly budget deficit ever in June due to spending to fight the recession after the coronavirus lockdowns, while tax revenues were down because millions of people lost their jobs.

The deficit hit $864 billion last month, according to the Treasury Department. 

That amount was also tied to the trillions of dollars Congress has provided to cushion the impact of the widespread shutdowns that occurred in an effort to limit the spread of the viral pandemic.

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The projected deficit for the entire year is $3.7 trillion by far the biggest ever, according to the Congressional Budget Office's forecast. And that projection could go higher, depending on the strength of the economy.

Another reason for the surge in the June deficit was the government's decision to delay tax payments this year until July 15. That decision means that quarterly payments made by individual taxpayers and corporations will not be due until July 15 this year rather than June.

So far this budget year, revenues total $2.26 trillion, down 13.4% from the same period last year, while spending totals $5 trillion, up 49.1% from a year ago.

Congress which has already approved more than $3 trillion in a series of rescue packages, is scheduled to debate another support effort when it returns from recess on July 20. Democrats are pushing for an extension of the expanded unemployment benefits which will soon run out.

Nancy Vanden Houten, a senior economist at Oxford Economics, said she was expecting that lawmakers would end up compromising on a new economic support package that would fall somewhere between a $3.5 trillion measure passed by the House but not taken up by the Senate and what is shaping up to be an opening offer by Senate Republicans for a package of about $1.5 trillion.

"The risk is that the deficit will be larger due to additional stimulus but, given the congressional timetable, the impact of the next package will likely be skewed to fiscal 2021, which starts Oct. 1," she said.

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