U.S. begins budget year in the red

/ Source: Reuters

The U.S. government started out its new budget year in the red in October, the Treasury Department said on Monday in its monthly budget statement.

The Treasury said the federal government posted a deficit of $69.55 billion in October, the first month of the 2004 budget year. The shortfall was bigger than a $54.07 billion gap in the same month in 2002.

Monday’s figures were in line with analysts’ projections.

The deficit for the just-ended 2003 budget year was revised slightly to $374.25 billion from the originally reported $374.22 billion. The 2003 shortfall remained a record, surpassing the $290 billion mark seen in 1992.

Another record is expected to be set for 2004. The last official Bush administration projection in July called for a $475 billion deficit, while the Congressional Budget Office forecast a $485 billion shortfall. Lawmakers are still haggling over the outlines of the 2004 federal budget.

The spiraling deficits have become a focal point for political attacks by Democrats on the Bush administration’s economic and fiscal policies. Administration officials, however, have defended the shortfalls as brought on by a sluggish economy and efforts to battle terrorism.

In 2003, spending increased by 7.2 percent, while receipts fell by 3.8 percent. According to the CBO, overall receipts were the lowest as a percentage of the economy since 1959.