Federal Government Blows Past Record Spending in Fiscal 2020
The budget deficit tripled to a record $3.1 trillion—another all-time record.
The federal government spent a record $6.5 trillion in fiscal 2020, according to data released Friday by the Treasury Department, eclipsing the previous spending record of $4.5 trillion set last year.
Collectively, federal agencies spent half a trillion dollars in the month of September—$125 billion more than revenue brought in from taxes and other forms—resulting in the government’s 12th consecutive month running a deficit. In total, the federal government’s budget deficit reached $3.1 trillion in fiscal 2020, which more than doubled the previous record of $1.7 trillion set in fiscal 2009 during an economic recession.
According to the nonpartisan Committee for a Responsible Federal Budget, prolonged deficit spending grew the national debt to $21 trillion, or 102% of gross domestic product.
“The only other time debt has exceeded the size of the economy was at the end of World War II—and we ran years of mostly balanced budgets afterwards to bring it back down. We should be borrowing now, but once the economy recovers, our debt cannot continue to grow faster than the economy forever,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget. “It’s disappointing to see both candidates for President proposing trillions of dollars in additional debt instead of plans to save Social Security and Medicare. The deeper we dig this hole, the harder it will be to claw our way out.”
Unprecedented relief spending through the $2.2 trillion CARES Act added significantly to government spending that was already trending high. The Committee for a Responsible Federal Budget estimates the government committed or disbursed the entirety of the $2.2 trillion appropriated by Congress to combat COVID-19. Treasury does not provide line item spending on coronavirus-related spending in its datasets.
The Health and Human Services Department, Social Security Administration and Defense Department were the federal government’s bigger spenders in fiscal 2020. HHS spent $1.5 trillion, SSA spent $1.15 trillion and the Defense Department spent $690 billion.