US posts record deficit through March on pandemic spending

The fiscal year-to-date deficit at the end of March totaled US$1.7 trillion, compared to US$743 billion at the end of March 2020, according to the monthly Treasury report. — Reuters pic
The fiscal year-to-date deficit at the end of March totaled US$1.7 trillion, compared to US$743 billion at the end of March 2020, according to the monthly Treasury report. — Reuters pic

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WASHINGTON, April 13 — The US government posted a record deficit in the six months ended in March, a 130 per cent surge reflecting the impact of pandemic stimulus spending, the Treasury Department said yesterday.

Spending spiked by just over US$1 billion (RM4.13 billion) from October 2020 to March 2021 compared to the comparable period of the prior fiscal year, which concluded before the Covid-19 shutdowns took hold and before any major rescue packages were implemented.

The fiscal year-to-date deficit at the end of March totaled US$1.7 trillion, compared to US$743 billion at the end of March 2020, according to the monthly Treasury report.

“The effects of the pandemic, and the resulting decrease in employment, just started showing up at the very end of March” of last year, a Treasury official told reporters.

As a result, “the year-to-date totals that were not significantly impacted at this point by the legislative and economic impact of the Covid-19 outbreak, whereas, this year, obviously were significantly impacted,” the official said.

For March alone, the deficit surged 454 per cent to US$541 billion, Treasury said.

The US Congress last month approved President Joe Biden’s US$1.9 trillion rescue package that included US$1,400 cash payments to most US families as well as extended unemployment benefits, much of which was disbursed last month. — AFP

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