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Budget Deficit Jumps to $189.7 Billion in May

By Insert Byline
Wednesday, 10 Jun 2009 | 3:00 PM ET

The U.S. government posted a $189.65 billion budget deficit in May, a record for the month and the eighth straight monthly deficit, the U.S. Treasury said Wednesday.

US Capitol Building with cash
US Capitol Building with cash

In May 2008, the deficit was $165.93 billion.

The May deficit exceeded analysts' consensus forecast in a Reuters poll for a $181 billion budget gap.

In the first eight months of fiscal 2009, which ends Sept. 30, the budget deficit totaled $991.95 billion compared with $319.40 billion in the same period of fiscal 2008.

President Obama has pledged to rein in high budget deficits by addressing long-term challenges like health care and energy costs in a fiscally responsible way.

Last month, the White House forecast the deficit for the whole of fiscal 2009 at $1.84 trillion, more than four times the-then record $455 billion deficit for fiscal 2008.

Treasury prices fell after the May data, sending benchmark yields briefly above 4 percent for the first time in eight months after an auction of 10-year notes heightened worries over the cost of financing the U.S. budget deficit.

In May, receipts totaled $117.24 billion, down from $124.27 billion in May 2008, while outlays totaled $306.89 billion, a record for May and compared with $290.20 billion in May 2008.

Outlays included $9.9 billion in purchases of mortgage-backed securities from major U.S. mortgage finance sources Fannie Mae and Freddie Mac which the Treasury has undertaken to help reduce mortgage rates.

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