WASHINGTON – The U.S. government posted a deficit in March of $58.71 billion, the Treasury Department said Friday, bringing the year-to-date fiscal shortfall to more than a quarter of a trillion dollars.
Halfway through the 2003 budget year and ahead of April's annual flood of income tax receipts, the government's balance sheet was in the red by $252.65 billion, compared to a deficit of $131.92 billion in the same period in the prior budget year.
The March figure was lower, however, than March 2002's $64.24 billion gap. In its monthly projection, the Congressional Budget Office said it expected a smaller gap of about $54 billion, based on changes in the timing of monthly federal payments and receipts between March 2002 and 2003.
Wall Street analysts, however, had been expecting a larger shortfall, $61.08 billion.
The government is expected to post a record deficit this year, surpassing the $290 billion mark seen in 1992. The CBO forecasts a $286 billion shortfall, not including any changes brought about by President George W. Bush's tax cut under consideration by Congress.
Outlays have risen by 6.6 percent, to $1.078 trillion through March, pushed by increased military and health care spending. Receipts have dipped by 6.1 percent over the same time frame, as income from both corporate and individual income taxes has fallen.
Individual income tax collections were off by 6.8 percent through March, according to Treasury.
Officials will have a better gauge on how large the 2003 deficit will be after April, the crucial month for individual tax collections. April traditionally posts the largest monthly surplus in the year.
The government had run four years of annual surpluses up until 2002, when it posted a $157.79 billion deficit.
The return of ballooning deficits and the federal borrowing to finance them has made the tax cut fight on Capitol Hill more intense. While Bush had originally proposed a package of about $726 billion in tax cuts, the Senate instead trimmed the package to about $350 billion. Lawmakers have yet to hammer out a final package.
The White House argues tax cuts are the best way to boost the ailing U.S. economy, and says a more vigorous economy will result in an eventual return to budget balance. Congressional Democrats argue the proposed tax cuts are too large and will not provide immediate help to the economy.