Federal budget deficit hits record $3.1 trillion

WASHINGTON — U.S. Treasury Secretary Steven T. Mnuchin and White House Office of Management and Budget Director Russell Vought Friday released the final budget results for fiscal year 2020.

In part due to COVID-19 assistance, the deficit in FY 2020 was a record $3.1 trillion—$2.0 trillion more than forecast in the FY 2021 President’s Budget. The deficit was also three times larger than last year’s deficit of $984 billion.

The previous record of $1.4 trillion was set by the Obama Administration after the economic crisis in 2009.

“Thanks to President Trump’s pro-growth policies and the bipartisan CARES Act, we are experiencing a strong economic recovery,” said Secretary of the Treasury Steven T. Mnuchin. “The Administration remains fully committed to supporting American workers, families, and businesses and to ensuring that our robust economic rebound continues.”

“President Trump built the best, most resilient, economy in the world with historic tax cuts, deregulation, and fair trade deals,” said OMB Director Russ Vought. “As the country continues to open up and this Administration pursues its pro-growth agenda, our economy will continue its robust recovery, sending Americans back to work and improving our fiscal picture.”

While the economy has continued a steady rebound since March, there is concern that the millions still out of work won’t be able to afford their expenses without government intervention which could bring an economic hit to the country.

Year-end data from the September 2020 Monthly Treasury Statement of Receipts and Outlays of the United States Government show that the deficit for FY 2020 was $3.1 trillion; $2.1 trillion higher than the prior year’s deficit. The FY 2020 deficit was $2.0 trillion higher than the estimate of $1.1 trillion in the FY 2021 Budget published in February.

In addition to the record deficit, the total Federal borrowing from the public increased by $4.216 trillion during FY 2020 to $21.019 trillion. The increase in borrowing included $3.132 trillion in borrowing to finance the deficit as well as $1.084 trillion in net borrowing related to other transactions such as changes in cash balances and net disbursements for Federal credit programs.