CBO: Prior COVID-19 emergency bills will add $2.4 trillion to deficit

The four COVID-19 emergency relief bills passed in March and April will add a total of $2.4 trillion to the deficit, according to a new report by the nonpartisan Congressional Budget Office (CBO). 

The latest figures show the bulk of the deficit increase coming from the CARES Act, the March bill that included stimulus checks, increases to unemployment insurance, forgivable small business loans, and other major supports for business. 

That law alone accounted for $1.72 trillion in deficit increases expected over a decade.

Behind that was the April law extending the small business loans program, called the Paycheck Protection Program, which CBO estimated would add another $483 billion to the deficit.

The two earlier bills, which focused on the health care response and expanding paid leave, cost $8 billion and $192 billion, respectively. 

The latest projections come as some on the right have begun pushing back against the idea of another relief or stimulus bill, even as key unemployment benefits are set to run out Aug. 1. 

“If we were to do anything like the Pelosi bill, that would be another $3 trillion. That would bring federal spending up to well over $7 trillion this year,” economist Stephen Moore said at a Tuesday webinar hosted by Freedomworks, a libertarian advocacy group associated with the Tea Party.

Speaker Nancy Pelosi (D-Calif.) led the charge to pass the $3 trillion HEROES Act in the House, but Senate Majority Leader Mitch McConnell (R-Ky.) said the Senate would be writing its own, narrower bill, when the time was right.

Moore claimed that a bill of that size would bring the overall size of government spending to 52 percent of GDP. The CBO report demonstrated that the headline figures for the bills, which add up to roughly $3 trillion, may not all end up adding to the deficit, however.

Moore, who withdrew from consideration to be one of President Trump’s nominees to the Federal Reserve board last May after GOP Senators joined their Democratic colleagues in raising concern about his record, said Congress should focus on payroll tax holidays. 

Trump has pushed for the payroll tax holiday, but the idea has gained little traction at the Capitol.

Freedomworks also featured panelists advocating against aid to state and local governments, calling for them to “tighten their belts” in the face of nearly unprecedented budget shortfalls.

On Tuesday, 100 economists including former Federal Reserve Chairs Ben Bernanke and Janet Yellen signed a letter to Congressional leaders urging significant action.

“We all agree that an adequate response must be large, commensurate with the nearly $16 trillion nominal output gap our economy faces over the next decade,” the letter read.

It specifically called for extending unemployment benefits and giving aid to state and local governments.