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BUSINESS Tuesday 14 July 2020
U.S. budget deficit hits all-time high of $864 billion in June

By MARTIN CRUTSINGER of this year but many pri-
AP Economics Writer vate forecasters are con-
WASHINGTON (AP) — The cerned that a resurgence
federal government in- of virus cases could make
curred the biggest monthly consumers too fearful to
budget deficit in history in resume spending, which
June as spending on pro- drives 70% of the economy.
grams to combat the coro- Congress which has al-
navirus recession exploded ready approved more
while millions of job losses than $3 trillion in a series of
cut into tax revenues. rescue packages, is sched-
The Treasury Department uled to debate another
reported Monday that the support effort when it re-
deficit hit $864 billion last turns from recess on June
month, an amount of red 20. Democrats are push-
ink that surpasses most ing for an extension of the
annual deficits in the na- expanded unemployment
tion's history and is above benefits which will soon run
the previous monthly defi- out.q
cit record of $738 billion in
April. That amount was also
tied to the trillions of dol-
lars Congress has provided
to cushion the impact of This Sept. 18, 2019, file photo shows the view of the U.S. Capitol building from the Washington
the widespread shutdowns Monument in Washington. Associated Press
that occurred in an effort
to limit the spread of the vi- nancial crisis. actually have to pay out until July 15 this year rather
ral pandemic. The June deficit was driv- funds until the banks de- than June.
For the first nine months of en higher by spending on termine whether the busi- So far this budget year,
this budget year, which various government relief nesses met the criteria for revenues total $2.26 trillion,
began Oct. 1, the deficit programs such as an extra having the loans forgiven. down 13.4% from the same
totals $2.74 trillion, also a $600 per week in expand- Those requirements include period last year, while
record for that period. That ed unemployment benefits spending at least 60% of spending totals $5 trillion,
puts the country well on and a Paycheck Protection the loan amount on worker up 49.1% from a year ago.
the way to hitting the $3.7 Program that provided sup- pay with the other 40% go- The CBO estimate of a $3.7
trillion deficit for the whole port to businesses to keep ing to overhead costs such trillion deficit for this year
year that has been fore- workers on their payrolls. as rent and utilities. could go higher depend-
cast by the Congressional The report showed that the Another reason for the ing on the course of the
Budget Office. cost of the Paycheck Pro- surge in the June deficit economy. The country fell
That total would surpass tection Program in June was the government's deci- into a deep recession in
the previous annual record was $511 billion. That re- sion to delay tax payments February, ending a record
of $1.4 trillion set in 2009 flected a charge to the this year until July 15. That long expansion of nearly
when the government was government for all the decision mean that quar- 11 years. The Trump admin-
spending heavily to lift the bank loans made under terly payments made by in- istration is predicting that
country out of the reces- the program even though dividual taxpayers and cor- the economy will come
sion caused by the 2008 fi- the government will not porations will not be due roaring back in second half

Analog Devices buys

Maxim, creating

$68 billion chipmaker

NEW YORK (AP) — Com- for each share of Maxim
puter chip maker Analog common stock they hold
Devices is buying Maxim at the transaction's clos-
Integrated in an all-stock ing, according to the an-
deal that will create a nouncement Monday.
company worth about Analog stockholders will
$68 billion, and strength- own approximately 69% of Clouds are reflected in the headquarters of Analog Devices,
ens its position in the ana- the combined company, Inc., Monday, July 13, 2020, in Norwood, Mass.
log semiconductor sector. while Maxim stockholders Associated Press
The $20 billion acquisition will own about 31%. shareholders from both then, however. Maxim In-
would also give Analog Two Maxim directors will companies and regula- tegrated Products, Inc.,
a more defined roll in the join Analog's board once tors. Maxim was hit hard based in San Jose, Califor-
development technology the deal is complete, in- by the economic slow- nia, makes chips for manu-
for 5G networks and self- cluding Maxim President down brought on the pan- facturers, energy compa-
piloted vehicles. and CEO, Tunç Doluca. demic and its shares had nies and in healthcare. Its
Maxim stockholders will The deal is expected to slid 30% between February shares jumped more than
receive 0.630 of a share close next summer, but and March. Those shares 15% before the opening
of Analog common stock requires the approval of have been rising since bell Monday.q