The U.S. January budget deficit widened to $49.80 billion, the second-largest deficit on record for the month, underscoring the sea of U.S. government red ink, official data showed on Thursday.
The deficit for the fiscal year to date narrowed to $419 billion from $431 billion, but the gap is expected to widen as the effects of payroll and business tax cuts kick in.
Receipts for the month rose 10 percent to $227 billion, the Treasury Department said. Outlays rose by $28 billion to $276 billion.
The gaping budget hole is a white hot political topic, with both political parties wrangling over how best to tackle a budget deficit estimated at $1.48 trillion in fiscal 2011 -- or 9.8 percent of the U.S. economy -- that is adding to the towering national debt.
Concern about the U.S. deficit has escalated after a series of sovereign debt crises in Europe and elsewhere that have fueled a movement toward painful fiscal austerity initiatives in nations around the global.
(Editing by James Dalgleish and Andrew Hay)