Federal spending soared in March as the government sent a third round of stimulus payments to Americans, pushing up the budget deficit to a record $1.7 trillion in the first half of the fiscal year.
The budget gap is now more than double what it was for the same period a year ago, the Treasury Department said Monday. The Covid-19 pandemic and related shutdowns sent the economy into a tailspin starting in March 2020.
The deficit was $660 billion last month, 454% higher than it was in the same month a year ago. Revenue rose 13% to $268 billion, while spending increased 161% to $927 billion.
The government’s spending surge has provided some cushion to the economy from the pandemic’s devastation, but it has also sent deficits soaring to levels not seen since the end of World War II as a proportion of the economy. Weaker tax revenue has contributed to the shortfall.
“The increase in the deficit since before the pandemic is hard to wrap one’s head around,” said Wendy Edelberg, a former Congressional Budget Office chief economist who in June became director of the Hamilton Project, a think tank affiliated with the Brookings Institution.
