Downturn cited for soaring deficit
WASHINGTON — The federal budget deficit has surged to an all-time high of $1.42 trillion as the recession caused tax revenues to plunge while the government was spending to stabilize the financial system and boost the economy.
The imbalance, for the budget year ended Sept. 30, more than tripled last year’s record. The Obama administration projects deficits will total $9.1 trillion over the next decade unless action is taken.
As a portion of the economy, the budget deficit stood at 10 percent, the highest since World War II, according to data released Friday.
President Barack Obama has pledged to reduce the deficit once the recession ends and the unemployment rate falls. But economists worry that the government lacks the will to cut spending and raise taxes to get control of the imbalances.
For 2009, the government collected $2.10 trillion in revenues, a 16.6 percent drop from 2008. That was the largest percentage decline on records going back nearly seven decades. The plunge reflected declining income tax collections as millions of Americans lost their jobs or saw their wages cut.
Government spending last year jumped to $3.52 trillion, up 18.2 percent over 2008. The $700 billion financial bailout fund helped drive the 2009 increase, along with the $787 billion stimulus program.
“Today’s deficit numbers are yet another troubling reminder that our nation is on a dangerous and unsustainable fiscal path,” House Minority Leader John Boehner, R-Ohio, said in a statement.
Administration officials said the president was determined to get control of the deficits.
“It was critical that we acted to bring the economy back from the brink earlier this year,” White House budget director Peter Orszag said in a statement.
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