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US: Deficit $299.5b in first half fiscal '04

WASHINGTON -- The government produced a deficit of $299.5 billion in the first half of the 2004 budget year, the Treasury Department reported yesterday.

For the budget year that began Oct. 1, spending totaled $1.1 trillion, while revenues came to $850.4 billion.

The year-to-date deficit showed the government bleeding more red ink than the $253.1 billion shortfall recorded for the corresponding period last year. The latest figures underscore the worsening state of the government's balance sheets.

Compared with the period last year, spending was up 6.6 percent in the first six months of the 2004 budget year. Revenues, meanwhile, were up 3.1 percent from a year ago.

So far this budget year, the biggest spending categories were programs from the Health and Human Services Department, including Medicare and Medicaid, $266.4 billion; Social Security, $259.6 billion; military, $213 billion; and interest on the public debt, $157.3 billion.

On the revenue side, individual income tax payments came to $367.7 billion for the first six months of the 2004 budget year, down from $372 billion for the corresponding period a year ago. Corporate income tax payments totaled $67.3 billion so far this year, up from $44.6 billion for the period last year.

The White House expects the deficit for the entire budget year to balloon to $521 billion, while the Congressional Budget Office is forecasting $477 billion in red ink. Either projection would mark a record in dollar terms.

Democrats point to the growing deficits as evidence of what they believe is President Bush's poor handling of the economy. The Bush administration has attributed the deficits in part to fighting terrorism abroad and in the United States, and says it wants to cut the deficit in half over the next five years.

In March, the government recorded a deficit of $72.7 billion, compared with the $58.9 billion shortfall for March last year. March's deficit was based on revenues of $140 billion and spending of $212.7 billion.

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