Budget Office says deficit to reach $3.7 trillion in economic decline due to virus
WASHINGTON — A recession caused by the coronavirus pandemic and a burst of government spending on testing, health care and aid to businesses and households will nearly quadruple the government’s budget deficit to $3.7 trillion, the Congressional Budget Office said Friday.
The 2020 budget deficit will explode after four coronavirus response bills passed by Congress and signed by President Donald Trump promise to pile more than $2 trillion onto the $24.6 trillion national debt in just the remaining six months of the current fiscal year, according to the CBO’s report.
That’s more than double the deficit record set during President Barack Obama’s first year in office.
The CBO said lawmakers eventually will be forced to tackle the government’s chronic financial woes, if for no other reason than the looming insolvency of Social Security and Medicare.
The report is full of gloomy economic news, predicting a devastating hit to the economy this quarter at an annualized rate of decline of 40 percent, accompanied by a 14 percent unemployment rate.
Coronavirus-related federal debt and deficit figures are pointing to government red ink unparalleled since World War II.
Among the legacies of the pandemic, the report says, is a pile of trillions of dollars of debt, amassed by a political system that has proved incapable of taking even small steps to constrain this problem.
One lasting worry is the further shrinking of revenues that already were well below historic averages, even as the spending side of the federal ledger climbs due to the retirement costs of the baby boomers to Medicare and Social Security, record Pentagon spending and long-term COVID-19 response costs.