July 14, 2009 Tuesday
Updated

July 14, 2009
US deficit tops US$1t

WASHINGTON - THE US budget deficit reached more than one trillion dollars for the current fiscal year in June as the government wrestled with a prolonged recession, official data showed on Monday.

Nine months into the 2009 fiscal year that ends Sept 30, the budget deficit widened by US$94.316 billion (S$1.377 trillion) in June to 1.086 trillion dollars, according to the Treasury's monthly statement of receipts and outlays.

The June deficit was slightly better than the US$97.0 billion most analysts had forecasted.

Receipts during the nine-month period to June amounted to US$1.588 trillion, eclipsed by outlays of US$2.675 trillion.

The nonpartisan Congressional Budget Office forecasts the budget deficit could hit US$1.845 trillion for the fiscal year based on President Barack Obama's administration's US$3.5 trillion budget plan, approved by Congress in early April.

The White House has penciled in a deficit of US$1.841 trillion.

On a monthly basis, the budget deficit has increased by record amounts since February as the world's largest economy reels from a brutal recession that began in December 2007.

Typically monthly reports are volatile as revenue and spending fluctuate.

June is traditionally a month of budget surplus, but as in the preceding months, the federal budget was under pressure from a decline in tax revenues and an increase in stimulus and social spending as unemployment and health insurance benefit costs surge.

Receipts in June reached US$215.364 billion, a drop of 17 per cent from June 2008. It was the 14th consecutive month that receipts have fallen on an annual basis.

Spending in June soared 37 per cent from a year ago, to US$309.682 billion, a record for the month.

June marked the ninth month the government has run a deficit. The last time the US had a longer stretch was an 11-month streak that ended in March 1992. -- AFP

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