The US federal government will run a deficit of US$407 billion for the
budget year ending Sept. 30 this year, according to the latest estimates
released yesterday by the Congressional Budget Office (CBO).
The CBO also predicts that the budget deficit next year will increase further
to an all-time high of US$438 billion and could go even higher as the government
takes over mortgage giants Fannie Mae and Freddie Mac.
The red ink estimated by the CBO for this year is worse than the predictions
released by the White House in July. The government foresees an imbalance of
US$389 billion for 2008 and a deficit of US$482 billion for 2009.
In the last budget year that ended on Sept. 30, 2007, the federal deficit
dropped by 34.4 percent to US$161.5 billion, a five-year low since an imbalance
of US$159 billion in 2002,reflecting faster growth in government revenues than
spending.
The 2002 performance marked the first budget deficit after four consecutive
years of budget surpluses.
US government budget deficit set a record of 413 billion dollars in 2004. In
February last year, the Bush administration projected the government could
eliminate the deficit completely and return to a surplus by 2012.
