Clear75° WeatherClear75° Weather

Federal budget deficit hits record for May of $189.7 billion

WASHINGTON — The federal budget deficit jumped to a record for May of $189.7 billion, pushing the tide of red ink close to $1 trillion with four months left in the budget year.

The rising deficit reflects increased government spending due to the recession, and billions of dollars spent on bailouts for banks and other troubled companies.

The Treasury Department reported Wednesday that the deficit so far this fiscal year totals $991.9 billion. The administration is projecting the deficit for the budget year that began Oct. 1 will total an all-time record of $1.84 trillion. That would be more than four times the amount of last year's record deficit.

Because of the recession, spending has increased for benefit programs such as unemployment compensation and food stamps. Outlays also have risen because of the $789 billion economic stimulus package that President Barack Obama pushed through Congress earlier this year.

The new Treasury report showed government spending totals a record $2.37 trillion through the first eight months of the budget year, 18 percent more than a year ago.

At the same time, the downturn has cut into tax revenues. The report showed that government receipts total $1.67 trillion through the May, down 18 percent from last year. Rising unemployment and struggling businesses have meant a drop in income and corporate taxes.

Meanwhile, the U.S. trade deficit edged up in April as crude oil prices hit their highest level since December. But the imbalance so far in 2009 remained well below last year's pace, and economists expect that to continue as the global recession saps demand for automobiles, heavy machinery and other goods.

The Commerce Department said Wednesday that the deficit rose for a second straight month in April, climbing 2.2 percent to $29.2 billion. That was slightly higher than economists' expectations.

The overall deficit is running at an annual rate of $361.1 billion, about half of the $695.9 billion total for all of 2008.

Federal budget deficit hits record for May of $189.7 billion 06/10/09 [Last modified: Wednesday, June 10, 2009 8:57pm]

Copyright: For copyright information, please check with the distributor of this item, Associated Press.
    

Join the discussion: Click to view comments, add yours

Loading...