Uncle Sam collected $563 billion in July, the Congressional Budget Office said Monday, setting a new monthly record for federal income and helping slow the growth of the record-shattering deficit that’s built up during the coronavirus pandemic.
CBO said about half of that money comes from the IRS’s delayed tax deadlines. The agency moved its largest annual payment deadline from April to July this year, to give taxpayers a chance to get their affairs in order amid the pandemic.
That pushed receipts up 124% compared to July 2019, CBO said, and it helped to soften what’s been a sharply climbing deficit.
Uncle Sam was just $61 billion in the red for the month, compared to more than $864 billion in June, nearly $399 billion in May and more than $738 billion in April.
All told, the deficit through the first 10 months of the fiscal year is now $2.8 trillion — double the previous record set under President Obama — with two more months of pandemic spending still to go.
CBO said the year can be divided into before the pandemic — the period from October through February — and during the pandemic from March on.
Before, Uncle Sam’s receipts were coming in 6% ahead. Over the last four months, though, they’ve been about 10% behind 2019, suggesting the extent of the economic headwinds.
The biggest fiscal damage from the virus has come on the spending side, where spending during the pandemic months has totaled $3.3 trillion. That’s nearly $1.8 trillion more than the same period in 2019.
With two months still to go in the fiscal year, the deficit already stands at a staggering $2.8 trillion. That’s double the previous record set under President Obama during the Great Recession.
In July alone, CBO said, unemployment benefits rose from $3 billion last year to $110 billion this year. The Small Business Administration, which administers the Paycheck Protection Program loan guarantees, saw its spending rise from $103 million in July 2019 to $26 billion last month — a 250-fold increase.
Other welfare-style programs like Medicaid and food assistance also rose as people in hard times rushed to sign up.