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Every month the U.S. Treasury releases data on the federal budget, including the current deficit. The following contains budget data for May 2020, which was the eighth month of fiscal year (FY) 2020.
The deficit for May 2020 was $191 billion larger than the deficit recorded in May 2019. The sharp increase in the May deficit was caused by both higher spending and lower revenues, both of which stem in large part from the economic effects of the COVID-19 pandemic and the legislative response to it.
The increase in the May deficit would have been even larger if not for shifts in the timing of certain federal payments. In 2019, June 1 fell on a weekend, which shifted $50 billion of payments into May. Without those shifts, the May 2020 deficit would have been $241 billion larger than the deficit in May 2019.
The cumulative deficit through the first eight months of FY20 was $1,142 billion larger than it was through the first eight months of FY19. The increase in the cumulative deficit reflects an $886 billion increase in outlays and a $256 billion decrease in revenues.
The deficit varies from month to month and some months may even record a surplus – for example, when taxpayers are submitting their personal income taxes at the filing deadline. That typically happens in April, but has been delayed until July this year.
The recent increases in debt reflect the effects of the pandemic and the government’s decision to support those who were negatively affected by the closure of much of our economy to prevent the spread of COVID-19. Once the situation has stabilized, focus needs to return to the country’s underlying fiscal situation.