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US government posts $190 bln budget deficit in May

The US government posted a $189.65 billion budget deficit in May, a record for the month and the eighth straight monthly deficit, the US Treasury said.

In May 2008, the deficit was $165.93 billion.

The May deficit exceeded analysts' consensus forecast in a Reuters poll for a $181 billion budget gap.

In the first eight months of fiscal 2009, which ends September 30, the budget deficit totaled $991.95 billion compared with $319.40 billion in the same period of fiscal 2008.

US President Barack Obama has pledged to rein in high budget deficits by addressing long-term challenges like health care and energy costs in a fiscally responsible way.

Last month, the White House forecast the deficit for the whole of fiscal 2009 at $1.84 trillion, more than four times the-then record $455 billion deficit for fiscal 2008.

Treasury prices fell after the May data, sending benchmark yields briefly above 4% for the first time in eight months after an auction of 10-year notes heightened worries over the cost of financing the US budget deficit.

In May, receipts totaled $117.24 billion, down from $124.27 billion in May 2008, while outlays totaled $306.89 billion, a record for May and compared with $290.20 billion in May 2008.

Outlays included $9.9 billion in purchases of mortgage-backed securities from major US mortgage finance sources Fannie Mae and Freddie Mac which the Treasury has undertaken to help reduce mortgage rates. (Reuters)