• Monthly budget deficit pulls fiscal YTD deficit to $2.744 trillion.

• Receipts weaken sharply while outlays surge.

The U.S. Treasury Department reported that the federal government ran an $864.1 billion budget deficit last month, compared to an $8.5 billion deficit twelve months earlier. The Action Economics Survey anticipated an $800 billion deficit. Since the start of the fiscal year, which began in October, the cumulative deficit increased to $2.74 trillion versus $747.11 billion one year ago.

So far this fiscal year, the deficit has surpassed the full fiscal year record of $1.41 trillion set in 2009. The fiscal year-to-date deficit is roughly 13% of GDP.

On a FY basis, federal government outlays jumped 49.1% this year. The increase in outlays was driven by a 131% jump in income security payments this fiscal year which reflected the higher unemployment rate and payments for the government's Paycheck Protection Plan. Defense outlays grew a lessened 6.0% y/y and health care outlays rose an accelerated 27.4% y/y in FY20. Medicare payment growth jumped to 22.3% y/y.

On the revenue front, the recession and the extension of the April 15 tax-filing deadline to July 15 lowered individual income tax receipts by 24.3% y/y. Corporate tax receipts fell even more sharply. Growth in social insurance tax payments slowed to 4.9% y/y and the reduction in global economic trade pulled the y/y advance in customs duties down to 2.2% so far in FY 2020.

Haver's data on Federal Government outlays and receipts as well as CBO forecasts are contained in USECON; detailed data can be found in the GOVFIN database. The Action Economics Forecast Survey numbers are in the AS1REPNA database.

Policymakers' Response to COVID-19 Can Draw on Great Recession Lessons from the Federal Reserve Bank of Dallas is available here.