US deficit climbs to highest yet

The US government registered a record budget deficit in February despite rising revenues, setting a record 17th consecutive month in the red, the Treasury said Wednesday.

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The February budget shortfall was 220.909 billion dollars, a 14 percent rise from a year ago and the biggest monthly gap on record.

The reading, however, was slightly better than the consensus analyst forecast of a deficit of 222 billion dollars.

The widening budget gap in February was led by a 17 percent jump in government spending, which hit 328.429 billion dollars, a record for the month of February.

The record monthly number came after two consecutive months of shrinking gaps that had left the January deficit at 42.6 billion dollars.

Spending surged notably because of tax credits to individuals and businesses, part of a three-year budget stimulus plan launched in February 2009.

On the plus side, government revenues rose on an annual basis in February for the first time since April 2008.

Revenues climbed 23 percent to 107.521 billion dollars, largely on the back of stronger income from business tax and customs receipts.

However, since the beginning of the current fiscal year on October 1, 2009, revenues have fallen.

The accumulated deficit for the first five months of the fiscal year reached a record 651.602 billion dollars by the end of February.

The White House warns that the deficit for the 2009-2010 fiscal year could balloon to 1.555 trillion dollars, eclipsing the prior year’s record of 1.415 trillion dollars, because of government spending to stimulate recovery from the worst recession in decades.

President Barack Obama has vowed to reduce the deficit, beginning the following year.

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