The federal government shattered the record for monthly deficits in April, ending the month $737 billion in the red, according to preliminary projections by the Congressional Budget Office.
April is usually the government’s best month, with income tax payments due. Indeed, last April the Treasury posted a $160 billion surplus, making this year’s monthly deficit a turnaround of nearly $900 billion.
“That substantial difference stems from the economic disruption caused by the novel coronavirus pandemic and from the federal government’s response to it,” the CBO said.
The feds burned the candle from both ends.
Spending more than doubled, at nearly $1 trillion in just one month. The government had never topped even $500 million in any month before.
Meanwhile revenue cratered, dropping 55% compared to last April. That’s chiefly because the IRS gave a reprieve to taxpayers amid the pandemic, allowing them to miss the April 15 deadline and file later in the year.
But the CBO said it’s likely some of the money will never come in, with some businesses and individuals becoming insolvent and unable to pay.
The CBO releases a preliminary projection based on its analysis of daily statements from the Treasury Department. Treasury will release the final numbers next week.
