The US government posted its largest budget gap in history, of $374.22 billion, in the just-ended 2003 fiscal year, the Treasury Department said last night.
That broke the previous record of more than $290 billion in the 1992 budget year. As a percentage of the economy, the deficit totaled 3.5 per cent, the largest since 1993. In its final monthly budget statement for fiscal 2003, the Treasury also said the government posted a $26.38 billion surplus in September.
Administration officials warned the deficit, which they blame on sluggish government revenues and rising expenses related to the war on terrorism, may be even larger in the current 2004 budget year, which began October 1st.
But Treasury Secretary Mr John Snow said a rebounding economy should help the budget going forward.
The September numbers, while well below the administration's official forecast for a $455 billion budget gap, were close to Wall Street and Congressional Budget Office projections.
The record gap will likely fuel political bickering over the deficit. The previous record deficit was posted by President George W. Bush's father, and was a major issue in his losing bid for reelection in 1992. In 2000, the government posted a record surplus of $236.92 billion.