U.S. budget deficit rises to 57.6 bln USD in May

14:52, June 14, 2011      

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The U.S. federal government's budget deficit increased 42.7 percent to 57.6 billion dollars in May over the previous month, pushing the imbalance in the first eight months of this fiscal year close to 1 trillion dollars, reported the Treasury Department on Friday.

The 57.6 billion dollars fiscal red ink in May was higher than the 40.4 billion dollars in April, but was better than the 135.9 billion dollars in May 2010, said the department.

In the first eight months of fiscal year 2011, which began in October 2010, federal deficit totaled 927.4 billion dollars. That is slightly lower than last year's pace, when the deficit recorded at 1.29 trillion dollars.

Last month, the U.S. federal government received 174.9 billion dollars, but spent 232.6 billion dollars.

The Treasury Department estimated that federal deficit in full fiscal year 2011 will reach 1.65 trillion dollars, the record high level.

Soaring deficit has triggered hot debate between the two parties. Republicans insist that the White House needs to deeply cut spending, while the Obama administration and Democrats argue that a too deep cut will sacrifice the nascent recovery.

Recently, the big fiscal fight in Washington is how to increase the debt limit, the legal ceiling on borrowings which was hit on May 16.

Treasury Secretary Tim Geithner has repeatedly urged Congress to avoid the catastrophic economic and market consequences of a default crisis by raising the statutory debt limit in a timely manner to avoid first-ever federal government default on its obligations.

The U.S. public debt surged after the burst of the financial crisis and economic recession. The federal government annual deficit hit 1.41 trillion U.S. dollars in 2009 fiscal year and 1. 29 trillion dollars in 2010 fiscal year.

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