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Last Updated: Wednesday, 11 August, 2004, 20:39 GMT 21:39 UK
US budget deficit soars in July
Yellow taxis at traffic lights in New York
The US government is spending more than it is earning
The US government ran a larger-than-expected budget deficit in July, official figures show.

The deficit for the month was $69.16bn (37.8bn), based on revenues of $134.42bn and spending of $203.58bn, the US Treasury department reported.

July's deficit was above forecasts for a shortfall of $61bn, and wider than last year's figure of $54.24bn.

The total budget deficit for 2004 is set to hit a record high of $445bn, according to White House projections.

Political issue

With just August and September left in the US federal budget calendar for 2004, the shortfall between receipts and spending has so far reached $395.78bn.

The White House has said the deficits, compared with the overall size of the US economy, remain manageable.

It has pointed to the war on terror and an economic downturn as contributory factors affecting current deficit levels.

But with the presidential election on 2 November, soaring US deficits have become a hot political issue.

Democrats have placed much of the blame for the return to annual deficits - after a period of surpluses between 1998 and 2001 - on tax cuts implemented by President George W Bush's administration.


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