WASHINGTON (Reuters) - The government posted a record monthly budget deficit of $222.5 billion in February as spending growth outstripped revenue gains crimped by tax cuts enacted late last year, the Treasury Department reported on Thursday.
The budget gap for February — typically a large deficit month — beat the previous record for any month of $220.91 billion set in February 2010. But it came in under the consensus forecast of a $227.5 billion gap from analysts polled by Reuters.
The Treasury said the cumulative deficit through the first five months of fiscal 2011 was $641.26 billion, down from $651.6 billion in the same period a year earlier.
Outlays for February rose about $4.8 billion from a year ago to $333.16 billion, also a record for any month. February receipts rose $3.1 billion from a year earlier to $110.66 billion.
The government in December extended unemployment insurance benefits and cut payroll and some business taxes, which is taking a toll on revenue this year.
Companies claiming tax credits and refunds caused net corporate receipts to turn negative by about $1 billion during February, compared to net receipts of about $8 billion during the same period last year.
Contributions to social insurance trust funds supported by payroll taxes also are starting to show a slowdown from lower payroll tax rates.
February usually results in the fiscal year’s largest deficits because there are fewer working days to withhold income taxes while monthly benefit payments remain steady. Tax refunds to individuals and companies also tend to gain momentum during the month.
The February deficit was the 29th consecutive monthly deficit posted by the United States, extending the longest stretch of deficits in its history.
Reporting by David Lawder; Editing by Padraic Cassidy