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US budget deficit seen at $400bn | US budget deficit seen at $400bn |
(about 2 hours later) | |
The US budget deficit is expected to reach $400bn (£205bn) this year, according to estimates from the Congressional Budget Office. | The US budget deficit is expected to reach $400bn (£205bn) this year, according to estimates from the Congressional Budget Office. |
The figure for the twelve months to September 30 is larger than a previous estimate by the White House of $389bn. | The figure for the twelve months to September 30 is larger than a previous estimate by the White House of $389bn. |
Factors behind the deficit increase include the cost of the war in Iraq and problems in the housing market that prompted a wider economic slowdown. | Factors behind the deficit increase include the cost of the war in Iraq and problems in the housing market that prompted a wider economic slowdown. |
The largest US deficit to date was $412.7bn, reached in 2004. | The largest US deficit to date was $412.7bn, reached in 2004. |
The largest factor contributing to an increase in outlays "was the $15bn disbursed in July this year by the Federal Deposit Insurance Corporation to cover deposits at failed financial institutions," said the CBO. | |
Defence spending also saw "strong growth" in the ten months to July. | |
The White House recently estimated that the deficit in 2009 would be $445bn. | |
Another factor contributing to the wider deficit is an increase in federal spending in a bid to boost the economy. | Another factor contributing to the wider deficit is an increase in federal spending in a bid to boost the economy. |
The government set out plans for an economic stimulus package at the start of the year, involving about $145bn in tax cuts to encourage spending. | The government set out plans for an economic stimulus package at the start of the year, involving about $145bn in tax cuts to encourage spending. |
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