The U.S. budget deficit has soared to $1.48 trillion for the first seven months of the current fiscal year, according to a new estimate from the Congressional Budget Office (CBO).
The CBO's projection for the first seven months of fiscal 2020 is larger than the biggest full-year deficit on record, which was $1.4 trillion in 2009.
In April alone, the federal deficit reached a record $737 billion — larger than the annual deficit recorded most years.
That deficit compares to a monthly surplus of $160 billion that the CBO recorded in April 2019. The CBO noted that the U.S. traditionally sees a surplus in April due to tax payments, which were deferred this year until July due to the pandemic.
Tax receipts from both individuals and corporations were down substantially last month, bringing overall revenues for April alone down 55 percent while spending more than doubled.
"That substantial difference stems from the economic disruption caused by the novel coronavirus pandemic and from the federal government’s response to it, including actions by the Administration and enactment of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the Families First Coronavirus Response Act (FFCRA)," the CBO wrote.
The federal government has taken broad action to stave off economic disaster resulting from the coronavirus pandemic, passing $3.6 trillion in economic stimulus since the outbreak began.
The CBO projected last month that the annual deficit would reach a record-shattering $3.7 trillion. But additional emergency legislation passed since then has led experts to believe that the deficit is on track to surpass $4 trillion this year.
Even before the pandemic, the deficit was on track to surpass $1 trillion for the only time since the four-year stretch following the Great Recession.
Economists say a robust fiscal response to the pandemic can help prevent a more severe economic downturn, but warn that the country's policymakers will eventually need to find a plan to reduce the country's growing debt burden.
Otherwise, they say, the debt level itself could start to eat away at economic growth.
"Today’s jaw-dropping figure serves as a reminder: We must be clear-eyed about the difficult decisions that lay ahead, which are too large for the usual partisan gridlock," said Bill Hoagland, senior vice president at the Bipartisan Policy Center.
"Eventually, we will lose our fiscal capacity to respond to future emergencies when they inevitably come. Congress and the administration must break this cycle as soon as the economy is firmly on the road to recovery. We cannot afford another decade of inaction,” he added.