Outlays soared to $1.1 trillion last month, nearly half of which went to emergency small-business loans under the Paycheck Protection Program, CBO estimated. Congress enacted the law in March to help small companies meet payroll expenses and keep workers attached to their jobs.
Spending on unemployment insurance benefits also surged last month, as millions of Americans remained out of work despite efforts by many states to resume normal activity after months of shutdowns. Outlays for jobless benefits climbed from $2 billion in June 2019 to $116 billion last month, nearly half of which was because of the extra $600 in weekly benefits that Congress authorized as part of what is known as the Cares Act. Those enhanced payments are set to expire at the end of this month unless Congress chooses to extend them.
Spending for other safety-net programs also climbed last month, including outlays for nutrition assistance, Medicaid and emergency funds for hospitals.
Federal revenues, meanwhile, sank 28%, to $242 billion, which the CBO attributed to declining wages and reduced economic activity, which weigh on tax collection, as well as the administration’s decision to delay tax-payment deadlines until July 15.
Federal deficits typically deepen during economic downturns, as rising unemployment pushes up spending on safety-net programs such as jobless benefits and food stamps, and weighs on federal tax revenues. The U.S. budget gap was already expanding — and was on track to exceed $1 trillion in the fiscal year that ends Sept. 30 — when the coronavirus pandemic hit. Congress has since authorized $3.3 trillion in new spending to help combat the virus.
