September 12, 2008 in Nation/World

Budget deficit hit record in August

By MARTIN CRUTSINGER Associated Press
 

WASHINGTON – The federal budget fell further into the red in August, pushing the deficit with one month left in the budget year to an all-time high.

The Treasury Department reported Thursday that the deficit through the first 11 months of this budget year totaled $483.4 billion, up 76.2 percent from the same period a year ago.

While that set an all-time high for a budget deficit through the first 11 months of a budget year, analysts say a surplus in September will push the deficit slightly below the current record-holder for an entire year, a $413 billion deficit set in 2004.

The administration is projecting that the deficit for this budget year, which ends on Sept. 30, will total $389.4 billion.

While slightly below the record in dollar terms, it would be more than double the 2007 deficit of $161.5 billion.

The marked deterioration in the government’s fiscal standing reflects a drop in revenues this year as the economy has been hit by a series of blows from the worst collapse in housing in decades to a severe credit crisis. The higher deficit reflects in part the $168 billion economic stimulus program Congress passed in February to keep the country’s economic woes from cascading into a severe recession.

Already, the administration is forecasting that the deficit for the budget year that begins on Oct. 1 will hit an all-time high of $482 billion. That will mean that whoever gets elected in November will be facing severe budgetary constraints.

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