MercoPress. South Atlantic News Agency

US federal budget 2009 shortfall could reach one trillion

The US budget deficit widened more than economists forecast in January as spending soared and corporate tax receipts shrank, putting the Treasury on course for a record annual shortfall of more than one trillion USD.

The excess of spending over revenue in January rose to 83.8 billion, compared with a 17.8 billion surplus in the same month a year earlier. Spending gained 30.6%, while revenue dropped 11.4%. Corporate tax revenue in the past four months is down 44.3% from a year earlier. The US deficit four months into the 2009 fiscal year already is higher than the record for all of the previous year. A recession now in its second year, rising foreclosures and 13 straight months of job losses are cutting tax receipts. At the same time, the government is pledging hundreds of billions of dollars of taxpayer funds to arrest the financial crisis. "We're experiencing a terribly challenging fiscal environment and a terribly challenging economic and financial crisis," Treasury Secretary Timothy Geithner said earlier in testimony to the Senate Budget Committee. The Treasury also revealed that the US would reach its debt limit of 11.3 trillion in the first half of this year, given it needs to borrow 34% more this quarter than initially projected. Borrowing needs in the three months to March 31 will be 493 billion. In the quarter that ended December 31, the Treasury borrowed a record 569 billion.