WASHINGTON - The federal deficit climbed higher into record territory in July, hitting $1.27 trillion with two months remaining in the budget year.
The Treasury Department said yesterday that the July deficit totaled $180.7 billion, slightly more than the $177.5 billion economists had expected. The Obama administration is projecting that when the current budget year ends on Sept. 30, the imbalance will total $1.84 trillion, more than four times last year’s record-high.
Massive amounts of government spending to combat the recession and stabilize the US financial system have pushed the deficit higher. The cost of the wars in Iraq and Afghanistan, along with depleted tax revenues, also are major factors.
The July deficit reflected government spending of $332.2 billion, a record amount for any month and up from outlays of $263.3 billion in July 2008. Of that increase, about $25 billion reflected the fact that Aug. 1 was a Saturday this year, requiring many government benefit checks to be sent out earlier and counted as spending in July.
Government receipts totaled $151.5 billion, down 5.6 percent from a year ago. It marked the 15th consecutive month that government receipts have been lower than the same month in the prior year, illustrating how deep the recession has cut into tax receipts.
The total public debt now stands at $11.6 trillion. Interest payments on the debt cost $452 billion last year, the largest federal spending category after Medicare-Medicaid, Social Security, and defense.