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US deficit climbs to $1.3 trillion

Last Updated: Friday, August 7, 2009 - 09:51

Washington: The US budget deficit reached USD 1.3 trillion for the current fiscal year in July, official data showed, news set to fuel opposition to US President Barack Obama`s ambitious health care and climate change proposals.

The deficit for the first 10 months of fiscal year 2009, which began October 1, reached USD 1.3 trillion, close to 880 billion dollars greater than the deficit recorded through July 2008, said the US Congressional Budget Office (CBO).
Outlays rose by almost USD 530 billion, or 21 percent, and revenues fell by more than USD 350 billion, or 17 percent, compared with the amounts recorded during the same period last year, the non-partisan CBO said.

The new data was likely to stoke Republican opposition to Obama`s plans to remake the US health care system and enact sweeping legislation to battle climate change, as well as fuel criticism of his handling of the economy.

Republicans have charged that the nearly USD 800-billion economic stimulus package Obama and his Democratic allies pushed through earlier this year only swells the deficit and has not paid off in jobs recovered.

The president late Thursday declared America may be seeing the beginning of the end of its economic nightmare, and fired a blistering attack on his Republican critics.

"The recession was years in the making, it didn`t just start last month. That bank crisis didn`t happen on my watch. Let`s get the history straight," he said in a fiery and partisan speech reminiscent of his barnstorming 2008 election rhetoric.

The President argued that his mammoth USD 787-billion rescue plan and other emergency measures had stopped the economy`s free-fall and cut the rate of job losses.

"We may just be seeing the very beginnings of the end of this recession," he said.

Obama cranked up his counter-attack as a new poll suggested voter patience may be wearing thin with his economic rescue effort, with his sky-high job approval rating slumping to 50 percent, the lowest since his inauguration.

The Quinnipiac University poll rating was a significant dip from the 57 percent Obama enjoyed on July 2, and followed a month of fierce battles of his economic rescue plans and signature healthcare reform.

The White House is also bracing for new unemployment figures due Friday that analysts expect to show the jobless rate climbing to a 26-year high of 9.6 percent, ever closer to the politically perilous 10-percent mark.

Bureau Report

First Published: Friday, August 7, 2009 - 09:51

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