MNI POLICY: U.S. Treasury Says 2020 Deficit Hit Record USD3.1T

The U.S. federal deficit hit a record USD3.1 trillion at the end of the fiscal year 2020, according to official estimates by the Treasury Department released Friday, with a USD125 billion deficit in September alone rounding out the year.

The next largest deficit was in 2009 at USD1.4 trillion when the Obama administration fought the effects from the financial crisis. The current shortfall also represents the largest deficit relative to GDP since the end of World War II in 1945 at 15% of GDP.

This year's deficit is more than three times the one recorded in 2019 at USD984 billion, with revenues dropping 1% and outlays rising 47% in 2020, according to Treasury.

Debt held by the public climbed to USD21 trillion from USD16.8 trillion at the beginning of the fiscal year.

"Despite the USD4.2 trillion increase in debt outstanding," a senior Treasury official told reporters on a conference call, interest on the public debt was down 9%, or USD50 billion, and "that goes back to a 72 basis points decrease in weighted average interest rate on debt outstanding as of the end of the fiscal year."