US budget deficit sets record for May of $189.7b

• Source: Xinhua
• [10:32 June 11 2009]
• Comments

The US federal budget deficit in May hit a record of 189.7 billion dollars, pushing the red ink so far the current fiscal year to close to one trillion dollars, the Treasury Department reported Wednesday.

 The May imbalance followed a 20.9-billion-dollar deficit in April, the first deficit since 1983. April is a month when the government normally runs surpluses reflecting tax payments.

 In the first eight months of the current fiscal year that began Oct. 1, 2008, the federal budget deficit totaled 991.9 billion dollars, more than triple the amount of red ink incurred during the year-ago period.

 That means the country is well on track to register the first one-trillion-dollar annual deficit in its history.

 The Obama administration is forecasting that the budget deficit would rise to an all-time high of 1.84 trillion dollars in the current fiscal year, about four times the record set last year.

 Under the administration's estimates, the 1.84-trillion-dollar deficit will be followed by a red ink of 1.26 trillion dollars in 2010, and will never dip below 500 billion dollars over the next decade.

 The administration estimates the deficits will total 7.1 trillion dollars from 2010 to 2019.

 The worsening budget deficit reflects the soaring costs of the government's economic stimulus package and financial rescue program, and the recession, which has resulted in sharp decline in tax revenue.

 While tax revenues are down, the government is paying out more than expected for unemployment benefits and food stamps.