Deficit rises to record $2.7 trillion amid pandemic: CBO

The federal deficit in the first nine months of the fiscal year hit a record $2.7 trillion, nearly double the largest full-year deficit on record, according to Congressional Budget Office (CBO) estimates.

In June alone, the deficit hit $863 billion, more than 107 times the $8 billion deficit recorded in June of last year.

The deficit is on track to exceed $3.8 trillion, shattering the $1.4 trillion record set in 2009 as the global financial crisis led to the Great Recession.

The huge increase in the deficit comes amid an ongoing pandemic and extraordinary federal measures to keep the economy from collapse.

Congress has passed more than $3 trillion in health and emergency measures this year to stave off a depression and is debating another bill this month as some crucial benefits, such as expanded unemployment, are due to expire.

The House’s version of the bill would cost $3 trillion, but the Senate is eyeing a figure closer to $1 trillion.

The CBO noted that nearly half of the outlays in June came from the Payment Protection Program, a rescue program offering small businesses forgivable loans for keeping workers on their payrolls. It accounted for $551 billion of the $1.1 trillion spent that month.

Meanwhile, the stalled economy led to a 28 percent drop in tax receipts as both individual and corporate income taxes dropped. One reason for the drop-off, however, was the administration’s decision to postpone tax filings from April 15 to July 15, meaning a considerable uptick is expected next month.