UPDATE 1-U.S. Feb budget gap balloons to record $175.56 bln

Wed Mar 12, 2008 2:42pm EDT

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(Adds details from Treasury report, spokeswoman comments)

WASHINGTON, March 12 (Reuters) - The U.S. government turned in a $175.56 billion budget deficit for February, a record for any month, as federal spending grew but a slowing economy caused receipts to fall 12.1 percent from a year earlier, the U.S. Treasury said on Wednesday.

The February gap marked a 46.3 percent increase over the previous all-time single-month deficit of $119.99 billion in February 2007 and soundly exceeded Wall Street economists' consensus estimate of a $160.0 billion deficit in a Reuters poll.

February receipts fell to $105.72 billion from $120.31 billion in February 2007, the Treasury said, as both corporate and individual income tax payments slowed.

February outlays grew 17.1 percent to $281.29 billion, a record for February, from $240.30 billion in February 2007, the Treasury said.

The calendar contributed to the month's grim fiscal results. A Treasury spokeswoman said February outlays were increased by $19 billion because some March benefit payments for Medicare, Social Security and other programs were shifted into February because March started on a Saturday.

Due to the leap year, February had five Fridays compared to four a year earlier, causing more tax refunds to be paid out during February, the spokeswoman said. This caused the deficit to increase by another $14.6 billion.

For the first five months of fiscal 2008, which began last Oct. 1, the deficit reached a record $263.26 billion, up 62.3 percent from the $162.16 billion for the same period of fiscal 2007.

The previous record deficit for the first five months of a fiscal year was set in 2004, a year in which the government also reached its previous record full-year deficit of $413 billion. The White House last month estimated that the fiscal 2008 deficit would hit $410 billion, but that excludes undetermined supplemental spending requests for war funding in Iraq and Afghanistan. (Reporting by David Lawder; Editing by James Dalgleish)