The US government's budget deficit ballooned in fiscal 2008 to $US438 billion ($A617.8 billion), or 3.1 per cent of GDP, as the economic downturn began to bite, the Congressional Budget Office (CBO) said on Tuesday.
The estimate compares to the $US162 billion ($A228.5 billion) shortfall that represented 1.2 per cent of GDP in fiscal 2007, said the CBO, which monitors federal spending on behalf of the Senate and House of Representatives.
"That is about $US31 billion ($A43.7 billion) higher than the $US407 billion ($A574 billion) deficit CBO projected this summer, primarily due to lower than projected revenues and higher than expected spending for defence and deposit insurance," it said.
In its Monthly Budget Review, the CBO said corporate income taxes fell by around $US65 billion ($A91.7 billion) during fiscal 2008, which ended September 30, a reflection of "weakness in corporate earnings throughout the fiscal year".
Defence spending meanwhile leaped by 11 per cent, the biggest jump since 2004
, while the Federal Deposit Insurance Corporation paid out $US23 billion ($A32.4 billion) to cover insured deposits at failed financial institutions.
In July, the CBO's counterpart at the White House, the Office of Management and Budget, said the budget deficit would leap to a record $US482 billion ($A679.8 billion), largely due to an emergency economic stimulus and a slowing economy
Its forecast indicated that the next US president, who will take office in January following the November 4 election, will inherit some tough spending decisions from the very first day in the White House.