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Market Watch: U.S. Budget Deficit Climbs to $144 Billion in December – and More Red Ink on the Way
Article by Jeffry Bartash in Market Watch
The U.S. government ran a budget deficit of $144 billion in December and the gap is likely to grow even higher in the next few months after Washington approved more federal aid for the economy.
The deficit increased last month from just a $13 billion budget gap in the same month of 2019, the Treasury Department said Wednesday.
The budget gap in the first three months of the current fiscal year was 61% higher compared to a year earlier — $573 billion vs $357 billion.
The increased deficit almost entirely reflects a surge in government spending to try to keep the economy afloat until the coronavirus pandemic fades away.
Washington has spent trillions on stimulus checks for families, more generous unemployment benefits and grants to struggling businesses.
Government spending climbed 40% from a year earlier to $490 billion in December.
Most of the increase in spending last month was tied to health care and Social Security benefits. The federal government is spending more on coronavirus vaccines and related treatments.
Historically large budget deficits are expected to persist for some time. Last month Washington approved nearly $1 billion in fresh aid for the economy, with President-elect Joe Biden promising even more help is on the way.
The deficit topped $3 trillion in the fiscal year that ended on Sept. 30. It was the largest deficit as a percentage of gross domestic product since 1945.
The deficit was expected to be ….
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