By David Lawder

WASHINGTON (Reuters) – The U.S. government started fiscal 2021 with an October budget deficit of $284 billion, a record for the month, as coronavirus-related outlays spiked sharply from a year earlier and revenues declined, the Treasury Department said on Thursday.

That was 111% higher than the October 2019 deficit of $134 billion and 61% higher than the previous October record of $176 billion in 2009, during the financial crisis and recession.

It follows a record full-year deficit of $3.132 trillion for fiscal 2020, which ended Sept. 30, more than tripling the previous year’s shortfall due to COVID-19 aid spending.

Treasury officials said the 2020 deficit was held down partly by far lower outlays and stronger receipts in the early months of that fiscal year before the pandemic closed down large parts of the economy in March.

This year’s fiscal deficit could reach $1.5 trillion to $2 trillion if no further coronavirus spending bill is passed by Congress, said Marc Goldwein, senior vice president of the Committee for a Responsible Federal Budget.

Prior to the COVID-19 pandemic, the United States was on track for a $1 trillion deficit in fiscal 2021 because Republican-passed tax cuts in 2017 had reduced revenues.

“If we don’t do another COVID bill, we’re headed back to the old, unsustainable deficit path we were on,” Goldwein said.

But he added that CRFB, a budget watchdog group, is advocating additional targeted spending to sustain workers in hard-hit sectors, communities and health care efforts, including vaccine distribution, which will have positive effects on growth and federal revenues.

Congress remained at an impasse on Thursday in discussions about possible further aid, as Senate Republican Leader Mitch McConnell voiced his preference for a $500 billion package, far smaller than the $2.2 trillion in spending sought by Democratic House Speaker Nancy Pelosi, a Democrat.

U.S. federal revenues for October fell 3% to $238 billion, largely due to lower receipts withheld from paychecks resulting from reduced employment levels and a temporary deferment of Medicare and Social Security taxes ordered by President Donald Trump, a Treasury official said.

Outlays for the month increased 37% to $522 billion, which included large increases for health care, food assistance and unemployment compensation and other coronavirus aid programs.