U.S. Digs Deeper Into Debt

Aug 12, 2009 4:22pm

ABC News’ Matt Jaffe reports: Another month, another record federal deficit. The Treasury Department announced today that in July the deficit rose by $180.8 billion to a new record of $1.27 trillion. Over the course of the month, the government only had $151.5 billion in receipts, compared to $332.2 billion in outlays. Increased government spending to stem the current economic crisis, combined with a decrease in tax revenues, have caused the deficit to soar to new levels this year. The latest record of $1.27 trillion comes with two months still left in the fiscal year. The Obama administration has forecast that the deficit will eventually hit $1.84 trillion by September 30. The rising debt has raised concerns among key foreign lenders like China, the largest holder of U.S. government debt. In talks late last month with Chinese officials in Washington, Treasury Secretary Tim Geithner sought to ease such concerns. China has steadily continued to increase its holdings, while other foreign lenders such as Japan and Russia have moved away from U.S. debt. — Matt Jaffe

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