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Deficit rises to record $2.7 trillion amid pandemic: CBO

Deficit rises to record $2.7 trillion amid pandemic: CBO
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The federal deficit in the first nine months of the fiscal year hit a record $2.7 trillion, nearly double the largest full-year deficit on record, according to Congressional Budget Office (CBO) estimates.

In June alone, the deficit hit $863 billion, more than 107 times the $8 billion deficit recorded in June of last year.

The deficit is on track to exceed $3.8 trillion, shattering the $1.4 trillion record set in 2009 as the global financial crisis led to the Great Recession.

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The huge increase in the deficit comes amid an ongoing pandemic and extraordinary federal measures to keep the economy from collapse.

Congress has passed more than $3 trillion in health and emergency measures this year to stave off a depression and is debating another bill this month as some crucial benefits, such as expanded unemployment, are due to expire.

The House's version of the bill would cost $3 trillion, but the Senate is eyeing a figure closer to $1 trillion.

The CBO noted that nearly half of the outlays in June came from the Payment Protection Program, a rescue program offering small businesses forgivable loans for keeping workers on their payrolls. It accounted for $551 billion of the $1.1 trillion spent that month.

Meanwhile, the stalled economy led to a 28 percent drop in tax receipts as both individual and corporate income taxes dropped. One reason for the drop-off, however, was the administration's decision to postpone tax filings from April 15 to July 15, meaning a considerable uptick is expected next month.