The US budget deficit is expected to hit a record $1.4 trillion this year, some $950 billion greater than the shortfall recorded last year, the Congressional Budget Office (CBO) said.

Congress’s non-partisan financial watchdog said the forecast federal deficit for the fiscal year that ended last month was the highest shortfall – relative to the size of the economy – since 1945.

The deficit resulted from both declining revenues and increased spending, stemming mostly from aid to the financial system and fiscal stimulus to jolt the world’s largest economy from a prolonged recession, the CBO said.

Revenues were almost $420bn or 17 per cent below receipts chalked up last year, the lowest level in over 50 years.

At the same time, outlays increased by over $530bn or 18pc to the highest level also in over half a century. The federal deficit last year was $459bn.

The deficit estimates were based on data from daily statements from the US Treasury and CBO projections.

Source/Full Story:: Gulf Daily News
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