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Federal Deficit Is Nearly Double Last Year's Pace

The Nation

April 19, 2003|From Associated Press

WASHINGTON — The government ran up a deficit of $252.6 billion in the first six months of the 2003 budget year, nearly twice the total for the same period a year earlier, the Treasury Department reported Friday.

Record deficits are forecast this year and next as the government's financial situation continues to deteriorate.

The deficit so far this fiscal year, from October through March, compares with a shortfall of $131.9 billion a year earlier.

Revenues were down 6.1% to $825.2 billion for the six months in comparison to the same period a year earlier. That partly reflected lower tax revenue from the listless economy.

Individual income tax payments totaled $372.1 billion, representing a 6.8% decline from the previous year. Corporate tax payments plunged 43% to $44.6 billion. That sharp drop reflected in part the effect of business tax cuts enacted last year and weaker profits, the Congressional Budget Office said.

Federal spending for the six months totaled $1.08 trillion, a 6.6% increase from the corresponding period in fiscal 2002.

The biggest spending categories so far this budget year: Social Security, $249.3 billion; programs of the Health and Human Services Department, including Medicare and Medicaid, $246.5 billion; the military, $180.9 billion; and interest on the public debt, $160.6 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 blames the return of deficits on lingering effects of the 2001 recession and the costs of fighting terrorism. 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 pursued by the administration.

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