Oct. 16 (UPI) -- The U.S. budget deficit more than tripled to $3.13 trillion in fiscal year 2020, mostly due to the effects of the COVID-19 pandemic and the economic rescue legislation passed in response, the Treasury Department said Friday.
Most of the excess spending came from the emergency $2.2 trillion CARES Act, which boosted unemployment compensation and issued loans to businesses to keep workers on the payroll, the statement from the department and White House Office of Management and Budget said. The deficit in fiscal year 2019 was $984 billion. The federal government's fiscal year begins Oct. 1.
Federal outlays this year were $6.55 trillion, or $2.11 trillion more than in FY 2019, a 47% increase. September 2020 had a monthly budget deficit of $125 billion compared with a surplus of $83 billion in September 2019, the agency said.
Tax revenues totaled $3.42 trillion, about $42 billion lower than in fiscal year 2019, which accounted for a decrease of about 1%. The losses were partially due to lower collections of taxes and receipts.
Total federal borrowing from the public increased by almost $4.22 trillion during 2020 to $21.02 trillion, the Treasury Department said. The government borrowed $3.13 trillion to finance the deficit, along with $1.08 trillion in borrowing related to other transactions, the agency said.
Nevertheless, Steven Mnuchin, treasury secretary praised President Trump's commitment to bring back the economy in "an incredible comeback."
"Thanks to President Trump's pro-growth policies and the bipartisan CARES Act, we are experiencing a strong economic recovery," Mnuchin said in a statement. "The Administration remains fully committed to supporting American workers, families, and businesses and to ensuring that our robust economic rebound continues."
This year's deficit amounted to 15.2% of the U.S. gross domestic product, the greatest deficit as a percentage of the economy since 1945, according to the Bipartisan Policy Center's online deficit tracker.
"Even in times of economic growth, the federal government ran large and growing budget deficits, near $1 trillion per year," the nonprofit think tank said. "Before the COVID-19 pandemic, it was an ominous trend. Now that policymakers are enacting necessary, emergency measures to combat the crisis, federal budget deficits are escalating to levels not seen since World War II."
Mnuchin and U.S. House Speaker Nancy Pelosi, D-Calif, have continued to negotiate a third COVID-rescue bailout bill that would need to pass the Republican-controlled U.S. Senate to become law.
Mnuchin said that it would be difficult for Congress to pass a measure before the election.
The White House most recently introduced a $1.8 trillion plan that Pelosi said "falls significantly short" of what is required.