US budget deficit soars to $1.8tn

The US government has sharply revised its budget deficit for 2009 up by $89bn to $1.8tn - out of an overall budget of almost $4tn - reflecting the nation's ongoing recession.The figure represents 12.9 per cent of the gross domestic product (GDP) of the US in the 2009 fiscal year ending September 30, the White House office of management and budget said on Monday.In addition, the 2010 budget will almost hit the $3.6tn mark, with a deficit of $1.25tn, despite Barack Obama, the US president, eliminating 121 programmes costing $17bn from the plan, most of them defence related.Peter Orszag, the White House budget director, said on Monday the higher deficits were driven largely by the economic crisis inherited by the Obama administration.Lower tax revenues, higher than expected costs for programmes such as unemployment insurance amid rising jobless figures and the cost of bailing out the US financial and automobile industries were also factors, one White House official told AFP.US stocks fell in mid-morning trading on Monday, with the Dow Jones Industrial Average down 128.16 points or 1.5 per cent, to 8,446.59 points.