Budget Deficit Hits May Record of $189 Billion

The federal budget deficit hits record levels for May as it hit $189.7 billion, extending its total deficit for the fiscal year at almost $1 trillion.

Increased government spending due to the recession has been a large cause for the rising deficit, as well as billions of dollars spent on bailouts for banks and other companies in financial duress.

The Treasury Department reported Wednesday that deficit for this fiscal year totals $991.9 billion. The administration is projecting the deficit for the budget year that began Oct. 1, will total an all-time record of $1.84 trillion, which would be more than four times the amount of last year's record deficit.

Due to the recession, spending has increased for benefit programs such as unemployment compensation and food stamps. In addition, a very large part of the deficit is due to the $787 billion economic stimulus package that President Barack Obama pushed through Congress earlier this year.

The new Treasury report showed government spending totals a record $2.37 trillion through the first eight months of the budget year, 18 percent more than the year-ago period.

However, the report also showed a decrease in tax revenues as government receipts total $1.67 trillion through the May, down 18 percent from last year.

Under the administration's budget estimates, the $1.84 trillion deficit for this year will be followed by a $1.26 trillion deficit in 2010, and will never dip below $500 billion over the next decade. The administration estimates the deficits will total $7.1 trillion from 2010 to 2019.

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