WASHINGTON — The federal budget deficit is projected to hit a record $3.3 trillion as huge government expeditures to fight the coronavirus and to prop up the economy have added more than $2 trillion to the federal ledger, the Congressional Budget Office said Wednesday.
That’s more than triple the 2019 shortfall and more than double the levels experienced after the market meltdown and Great Recession of 2008-2009. Government spending, fueled by four coronavirus response measures, would register at $6.6 trillion, $2 trillion-plus more than 2019.
The economy shut down in the spring so people could be in isolation, in a failed national attempt to defeat the pandemic. That shutdown led lawmakers and President Donald Trump to pump money into business subsidies, larger unemployment benefits, $1,200 direct payments, and other stimulus steps that have helped the economy in the short term.
But deficit scolds have long warned that rising levels of debt will serve as a drag on the economy in the coming years. The Federal Reserve has stepped in to keep credit markets stable and interest rates low.
Lawmakers and the White House are currently quarreling over the size and scope of a fifth virus relief bill, with Republicans growing skittish at the enormous costs of battling the pandemic.
The enormous deficit is bringing the federal debt, as measured by the size of the economy, near levels not experienced since the end of World War II. At year’s end, the amount of debt held by investors will approach the size of the economy.