Sep 11 02:06 PM US/Eastern
By MARTIN CRUTSINGER
AP Economics Writer
WASHINGTON (AP) – The federal deficit surged higher into record territory in August, hitting $1.38 trillion with one month left in the budget year.
The Treasury Department says the deficit last month was $111.4 billion, below the $152 billion that economists expected.
Still, the imbalance added to a flood of red ink already accumulated through a severe recession and massive spending needed to stabilize the banking system.
The Obama administration last month trimmed its forecast for this year’s deficit to $1.58 trillion, from an earlier $1.84 trillion. The recovery of the banking system led to the reduced estimate as it meant the administration did not need to get an additional $250 billion in bailout support for banks.
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