The busiest month yet for the savings and loan cleanup ballooned the federal budget deficit to $11.2 billion in June, a month when corporate tax payments usually produce a surplus, the government said yesterday.
The shortfall, compared with a $7.8 billion surplus in June 1989, brought red ink for the first nine months of fiscal 1990 to $163.1 billion, more than half again as much as the $105.4 billion deficit at this time last year.
If the deficit continues to accumulate at this pace, it could top the record fiscal-year deficit of $221.1 billion set in 1986. The White House Office of Management and Budget is forecasting a budget gap of $218.5 billion, just short of the record.
White House negotiators and congressional leaders are attempting to put together a major deficit-reduction pact for fiscal 1991. Absent an agreement, OMB projects the 1991 deficit at $231.4 billion.
"The deficit is totally running out of control," said economist Michael K. Evans, who heads a Washington-based consulting firm. "Through January, the deficit was apparently in good shape. Starting in February, it started going bananas."
Evans attributed the ballooning budget gap to S&L cleanup spending and to sluggish economic growth, which is producing lower-than-expected tax revenue.
S&L cleanup spending by the government's Resolution Trust Corp. totaled $15.8 billion in June -- a third of its total spending through June of $45 billion. June was the bailout's busiest month. The RTC dealt with 83 institutions, bringing its total of bailouts and closings to 207.
Eventually, the government expects to sell real estate, loans, securities and other assets inherited from failed thrifts. That revenue should help reduce the budget deficit in future years.
The economy, as measured by the gross national product, grew at a sub-par 1.9 percent annual rate in the January-March quarter and is projected by most economists to have grown at an even slower 1.6 percent rate in the April-June period. As a result, corporate tax collections, through June, were $72.5 billion, down 9.2 percent from a year ago.
All revenue totaled $110.6 billion in June and $777.7 billion for the year to date, up 3.8 percent from the same period a year ago.