The US budget deficit soared to a record in the first quarter of the 2009 fiscal year, surpassing the shortfall for all of last year as the government used taxpayer money to shore up the financial system by purchasing stakes in banks.
The deficit swelled to $US485.2 billion ($727 billion) in the first three months of the fiscal year that started Oct. 1, the Treasury said today in Washington. For all of 2008, the shortfall was $US454.8 billion. The monthly budget picture also worsened, as the excess of spending over revenue widened to $US83.6 billion in December, compared with a $US48.3 billion surplus a year earlier.
President-elect Barack Obama will take over Jan. 20 facing the biggest budget deficit as a%age of US gross domestic product other than during the Civil War and the two World Wars, his nominee to head the Office of Management and Budget said today.
``We are inheriting a daunting fiscal position,'' Peter Orszag, nominated by Obama to be the White House budget director, told the Senate Budget Committee. The budget shortfall in the 12-month period to Sept. 30 will likely exceed $US1 trillion ``even without steps to mitigate the economic downturn,'' he said.
Government revenue fell 14.1% last month, while spending soared 40.5% compared with a year earlier.
The December shortfall was forecast to widen to $US83 billion, according to the median of 35 estimates in a Bloomberg News survey of economists, the same as the Congressional Budget Office's prediction on Jan. 9.
