The Congressional Budget Office said the federal budget deficit was $424 billion in May, well below the $738 billion recorded in April – but still the second-highest monthly shortfall in history. The CBO also said the deficit for the first eight months of the fiscal year came to $1.9 trillion, roughly $1.2 trillion more than the deficit in the first eight months of fiscal year 2019.
Revenues in May were down about 25% compared to the year before, due in large part to a sharp decline in individual income and payroll taxes. Spending, on the other hand, was up 53% compared to last year, once calendar discrepancies were taken into account.
The most notable changes were clearly driven by the pandemic, with outlays for unemployment compensation rising from $2 billion in May 2019 to $93 billion in May 2020. And outlays by the Small Business Administration rose from $98 million to $35 billion, driven by relief efforts for small business owners affected by the coronavirus shutdowns.