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Federal deficit soars to $3.1 trillion

WASHINGTON, D.C. – Year-end data from the September 2020 Monthly Treasury Statement of Receipts and Outlays of the United States Government show that the deficit for FY 2020 was $3.1 trillion; $2.1 trillion higher than the prior year’s deficit. The FY 2020 deficit was $2.0 trillion higher than the estimate of $1.1 trillion in the FY 2021 Budget published in February.

A surge in government spending in an attempt to brunt the damage from the coronavirus pandemic is partly to blame for the record deficit. The previous record of $1.4 trillion was set in 2009.

Total Federal borrowing from the public increased by $4.216 trillion during FY 2020 to $21.019 trillion.  The increase in borrowing included $3.132 trillion in borrowing to finance the deficit as well as $1.084 trillion in net borrowing related to other transactions such as changes in cash balances and net disbursements for Federal credit programs.

Total receipts for FY 2020 were $3.420 trillion, $286 billion lower than the Budget estimate of $3.706 trillion.  This net decrease in receipts was the net effect of lower-than-estimated collections of individual income taxes, corporation income taxes, and customs duties, excise taxes, estate and gift taxes, social insurance and retirement receipts, and other miscellaneous receipts, partially offset by higher-than-estimated collections for deposits of earnings by the Federal Reserve.

  • Individual income taxes were $1.609 trillion, $203 billion lower than the Budget estimate.  This difference was the net effect of lower withheld payments of individual income tax liability of $158.1 billion, lower nonwithheld payments of $68.8 billion, and lower-than-estimated refunds of $23.6 billion.
  • Corporation income taxes were $211.8 billion, $51.8 billion below the Budget estimate.   This difference was the effect of lower-than-expected payments of corporation income tax liability of $40.7 billion and higher-than-estimated refunds of $11.1 billion.
  • Social insurance and retirement receipts were $1.310 trillion, $2.1 billion lower than the Budget estimate.
  • Excise taxes were $86.8 billion, $7.8 billion below the Budget estimate.
  • Estate and gift taxes were $17.6 billion, $2.8 billion below the Budget estimate.
  • Customs duties were $68.6 billion, $23.8 billion below the Budget estimate.
  • Miscellaneous receipts were $116.5 billion, $5.2 billion above the Budget estimate.   This was the net effect of lower-than-expected collections of various fees, penalties, forfeitures, and fines of $4.0 billion; offset by higher-than-expected deposits of earnings by the Federal Reserve System of $9.2 billion, largely due to lower short-term interest rates and higher earnings as they have increased their asset holdings in response to COVID-19.
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