The White House has raised its forecast for the US budget deficit for this year by $89 billion, reflecting the recession, higher unemployment and corporate bail-outs.
A fresh estimate of the deficit showed it coming in at $1.84 trillion - representing a massive 12.9% of gross domestic product - in the current 2009 financial year which ends on September 30. A previous White House forecast released in February projected a deficit of $1.75 trillion, or 12.3% of GDP.
The report may add to the political challenges facing President Barack Obama as he seeks to push through a new healthcare plan and other big domestic initiatives.
A White House official said the gloomier deficit picture reflected weaker tax receipts as the economy declined and higher costs for social programmes such as unemployment insurance.
Spending on the government rescues for the financial and car industries was also a factor in the higher deficit, said the official, who spoke to reporters on condition of anonymity.
While the Democratic-led Congress has given its approval to the broad outline of Obama's proposed budget for the 2010 fiscal year - which includes initiatives on healthcare, education and other items - some moderate Democrats and a number of Republicans have expressed concerns about the deficit outlook.
The report from the White House Office of Management and Budget also revised the deficit higher for the 2010 fiscal year, forecasting it at $1.26 trillion, or 8.5% of GDP, up $87 billion from the projection given in February.
