Federal Deficit Skyrockets

WASHINGTON – The government ran up a deficit of $193.9 billion in the first five months of the 2003 budget year, nearly three times the deficit for the same period a year earlier.

In February alone, the deficit was $96.3 billion, the largest on record.

The latest figures, released Thursday by the Treasury Department, highlighted the government's deteriorating fiscal situation. Record deficits are forecast this year and next.

The total so far this fiscal year, from October through February, compares with $67.7 billion a year earlier.

Revenues were down by 8.2 percent to $704.8 billion for the five months. That partly reflected lower tax revenue from the sagging economy.

Individual income tax payments totaled $331.5 billion, an 11.4 percent drop from the previous year. Corporate tax payments plunged to nearly $33 billion, compared with $63 billion.

Federal spending for the five months totaled $898.7 billion, a 7.6 percent increase from the corresponding period in fiscal 2002.

The biggest spending categories so far this budget year are: Social Security, $210.2 billion; programs of the Health and Human Services Department, including Medicare and Medicaid, $208.7 billion; military, $152 billion; interest on the public debt, $147.2 billion.

For the entire 2002 budget year, which ended Sept. 30, the government ran up a deficit of $157.8 billion, ending four consecutive years of surpluses.

The Bush administration is projecting record deficits of $304 billion this year and $307 billion next year. Those projections factor in President Bush's proposed economic stimulus package, which consists mostly of tax cuts, but does not include outlays related to war with Iraq.

The administration has blamed the return of deficits on lingering effects of the 2001 recession and the costs of waging war in Afghanistan and battling terrorism at home. Democrats say a major cause of the red ink has been Bush's 10-year $1.35 trillion tax cut and what they contend are bad economic policies being pursued by the administration.

February's deficit compared with $76.1 billion for the same month last year.

The February deficit was based on revenues of $89.5 billion and spending of $185.8 billion.