Stimulus plan pushes deficit to all-time high

/ Source: The Associated Press

A flood of economic aid payments pushed the federal budget deficit to $165.9 billion, the highest imbalance ever for May.

The Treasury Department reported Wednesday that the May deficit was more than double what it was in May 2007. Some $48 billion in payments went out as part of the $168 billion economic relief effort to revive the economy and keep the country from a deep recession.

For the first eight months of the budget year, the deficit totaled $319.4 billion. That is slightly below the record for this period, $346 billion, set in the 2004 budget year.

The Bush administration estimated in February that the deficit for this year would be $410 billion. That would be just under the all-time high of $413 billion in 2004. But many private economists believe this year’s deficit will top it, reflecting the economic aid program but also weaker government receipts.

Through the first eight months of the budget year that began Oct. 1, receipts have totaled $1.67 trillion, 0.3 percent more than for the same period a year ago.

Outlays, however, are up 9.7 percent to $1.99 trillion. Factors include the economic aid and the costs of wars in Iraq and Afghanistan.

Military spending so far this budget year has come to $393.7 billion, 12.8 percent higher than during the same period a year ago. The Health and Human Services Department, which includes the government’s big health benefit programs, has seen a 5.8 percent increase to $475.3 billion.

At the Social Security Administration, spending has risen 7.1 percent to $436.1 billion. Interest payments on the debt are up 4.6 percent to $266.3 billion.

The $319.4 billion deficit total for the past eight months is more than double the $148.5 billion deficit for the same period in 2007.

Part of the increase in the May deficit reflected a timing issue for certain government payments. Because June 1 fell on a Sunday, about $20 billion in government outlays were shifted into May, making the deficit for that month larger.

The government normally runs a deficit in May. The only surplus since 1954 occurred in May 1960.