WASHINGTON – The federal government's budget deficit rose sharply in November as spending raced ahead of tax receipts.
The Treasury Department reported Monday that the deficit totaled $83.1 billion, the highest imbalance ever recorded in November.
For the first two months of the 2006 budget year, which began Oct. 1, the deficit totals $130.3 billion, 13.1 percent higher than the $115.2 billion in red ink run up during the same period last year.
Brian Bethune, U.S. economist for Global Insight, predicted the deficit will hit $359 billion this year. He said much of the increase would be fueled by spending for disaster relief, flood insurance and reconstruction related to the Gulf Coast hurricanes as well as increased spending for the new Medicare drug benefit.
"Interest payments will also increase significantly in response to the double whammy of higher federal debt levels and higher interest rates," Bethune predicted.
The 2005 deficit narrowed to $318.5 billion after hitting an all-time high in dollar terms of $413 billion in 2004.
For November, revenues totaled $138.8 billion, up 3.2 percent from November a year ago. Spending totaled $221.9 billion, up 15.3 percent from November 2004.
Analysts said the increase in part reflected higher payouts of flood insurance claims by the Department of Homeland Security related to Hurricane Katrina.
The faster rise in spending compared with revenues left the deficit at $83.1 billion, the largest imbalance ever recorded for a November, and up 43.5 percent from the deficit of $57.3 billion last November.