Uncle Sam is $1 trillion in the hole

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NEW YORK (CNNMoney.com) -- The federal budget deficit increased in June as spending surged and tax receipts sunk, pushing the total budget shortfall to over $1 trillion in the first 9 months of the fiscal year, according to a government report released Monday.

The Treasury Department said the June deficit was $94.3 billion, a reversal of fortune from the $33.5 billion surplus the government managed in June 2008. In May, the deficit was $189.7 billion.

Economists surveyed by Briefing.com had forecast a budget deficit of $97 billion. The Congressional Budget Office had also forecast a $97 billion shortfall last month.

The deficit was the largest shortfall the government has ever recorded in the month of June, and the first time it has come up short in June since 1991, according to a Treasury official. The largest monthly deficit on record was February 2009, when the government increased its shortfall by $193.9 billion.

For the first nine months of the fiscal year, which began in October, the total deficit hit $1.09 trillion.

In the first nine months of 2008, the United States government was $285.9 billion in debt. For all of fiscal 2008, the government racked up a $454.8 billion shortfall.

Spending surging, income shrinking: The government has been spending at a breakneck pace to slow the deceleration of the economy in the current recession. At the same time, tax revenue from companies and individuals has declined, adding to the shortfall.

So far in fiscal 2009, the government has spent $2.67 trillion, but it has only taken in $1.59 trillion.

The government collected $685.5 billion in individual income taxes so far this year, a 22% drop from the $877.8 billion the government had taken in during the first nine months of 2008.

Corporate income taxes plunged 57% to $101.9 billion in 2009, down from $236.5 billion in the first nine months of fiscal year 2008.

Looking forward: The Treasury expects that its expenses will continue to outstrip its income for the rest of this fiscal year and into next year.

By the end of fiscal 2009, the government expects to be in debt by $1.84 trillion. The Treasury said it expects that its expenditures to approach $4 trillion while its income will only be $2.16 trillion.

For fiscal 2010, Treasury said it expects to have a budget deficit of $1.26 trillion, with $3.59 trillion in expenses and a slightly more robust $2.33 trillion in receipts.