The Treasury Department will borrow a record-breaking $3 trillion between April and June as it moves to dispense emergency relief for the coronavirus pandemic.
In a Monday statement, the Treasury said that it expected to borrow $2.99 trillion “in privately-held net marketable debt,” which would leave it with a $800 billion cash balance at the end of June.
Congress has passed roughly $3 trillion worth of spending to help prevent an economic collapse during the pandemic, including stimulus checks, expanded unemployment insurance, forgivable loans to small businesses and other financing options for larger businesses.
“The increase in privately-held net marketable borrowing is primarily driven by the impact of the COVID-19 outbreak, including expenditures from new legislation to assist individuals and businesses, changes to tax receipts including the deferral of individual and business taxes from April – June until July, and an increase in the assumed end-of-June Treasury cash balance,” the statement said.
The borrowing will continue later in the year, with another $677 billion in debt expected in the third quarter. Those figures, on top of the $477 billion borrowed in the first quarter, are filling in the gaps for what is expected to be the largest annual deficit in the country’s history, which will likely top $4 trillion.
That figure will be more than double the previous record for the largest annual deficit, which amounted to $1.4 trillion in 2009, the peak of the Great Recession.
All that borrowing is set to push the nation’s overall debt load beyond 100 percent of GDP for the first time since World War II.