US FY 2008 budget deficit swells to record $455 bln

WASHINGTON, Oct 14 (Reuters) - The U.S. budget deficit hit a record $455 billion in fiscal 2008 as a slowing economy sapped revenues while spending on wars, bank failures and unemployment-related benefits soared, the Treasury Department said on Tuesday.

The deficit for the year ended Sept. 30 far outstripped the White House's most recent estimate of $389 billion, made in July, and nearly tripled the previous year's budget gap of $162 billion.

The Treasury's statement did not contain a new estimate for the fiscal 2009 deficit after making hundreds of billions of dollars in committments to backstop the banking system.

"This year's budget results reflect the ongoing housing correction and the manifestations of that in strained capital markets and slower growth," U.S. Treasury Secretary Henry Paulson said in a statement. "We are taking aggressive actions to stabilize our financial mrakets and strengthen our financial institution so they can finance growth."

(Reporting by David Lawder, Editing by Chizu Nomiyama) Keywords: USA BUDGET/

David Lawder

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