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US budget deficit growing twice as fast as last year

The US federal budget deficit is running at a pace that is more than double last year's imbalance through the first four months of the budget year.

In its monthly review of the government's finances, the Treasury Department said on Tuesday that the budget was in surplus last month, but totals a deficit of US$87.7 billion so far this budget year, double the US$42.2 billion imbalance recorded during the same period last year. The new budget year started on Oct. 1 last year.

The Bush administration sent its final budget request to Congress last week, projecting that the deficit for all of this year will total US$410 billion, very close to the all-time high in dollar terms of US$413 billion in 2004.

So far this year, federal spending is 8.3 percent ahead of last year's pace, at US$949.1 billion. That is far ahead of the 3.2 percent increase in revenues, which have totaled US$861.4 billion in the current budget year.

For last year, the budget deficit totaled US$162 billion, a five-year low. However, the slowing economy is expected to stunt the growth of tax revenues while the US$168 billion economic stimulus plan passed by Congress last week will swell the deficit.

It is hoped the stimulus plan will cushion the economy. Also see: Is Europe's housing sector next?
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