Treasury: $226 Billion Deficit in FY 2004 So Far

The government produced a deficit of $226.8 billion in the first five months of the 2004 budget (search) year - more red ink than for the same period the previous year.

The figures released Thursday by the Treasury Department (search) provided fresh evidence of the worsening state of the government's balance sheets.

The White House expects the deficit this budget year to balloon to $521 billion, while the Congressional Budget Office (search) is forecasting $477 billion in red ink. Either projection would mark a record in dollar terms.

Democrats point to the growing deficits as evidence of what they believe is President Bush's poor handling of the economy. The administration has blamed the deficits in part on fighting terrorism abroad and at home and says it wants to cut the deficit in half over the next five years.

For the budget year that began Oct. 1, spending totaled $937.1 billion, which was 4.2 percent more than the same period last year. Revenue growth, however, was much slower. Receipts came to $710.3 billion, a 0.8 percent rise from a year ago.

The year-to-date deficit of $226.8 billion was 16.8 percent larger than the shortfall of $194.2 billion reported for the first five months of the 2003 budget year.

So far this budget year, the biggest spending categories were programs from the Health and Human Services Department, including Medicare (search) and Medicaid (search), $216.3 billion; Social Security (search), $215.7 billion; military, $174.2 billion; and interest on the public debt, $143.2 billion.

On the revenue side, individual income tax payments came to $316.3 billion for the first five months of the 2004 budget year, down 4.6 percent from the same period a year ago. Corporate income tax payments totaled $48.4 billion so far this year, up from the nearly $33 billion for the same period last year.

In February, the government recorded a deficit of $96.7 billion, almost identical to the shortfall reported for the same month last year. February's deficit was based on revenues of $85.3 billion and spending of $182 billion.