U.S. Posts Record Deficit through March on Pandemic Spending

The U.S. government posted a record deficit in the six months ended in March, a 130 percent surge reflecting the impact of pandemic stimulus spending, the Treasury Department said Monday.

Spending spiked by just over $1 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 $1.7 trillion, compared to $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 percent to $541 billion, Treasury said.

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