US budget deficit widens to near $50bn in January

THE US budget deficit widened less than expected in January but was still the second-highest on record for the month, underscoring the liability it has become for the Obama administration.

The gap broadened to $49.8bn (£30.9bn), held back in part by a rise in tax receipts, the Treasury Department said. Analysts were expecting a $70bn shortfall.

The deficit for the fiscal year to date narrowed to $419bn from $431bn but is expected to expand as the effects of payroll and business tax cuts kick in.

The figures came as the US House Speaker, Republican John Boehner, called for the biggest budget cuts in US history as part of the Congress debates on President Obama’s federal budget for 2012.