Federal Deficit Reaches $1.27T in July

The federal deficit climbed higher into record territory in July, hitting $1.27 trillion with two months remaining in the budget year.

The Treasury Department says the July deficit totaled $180.7 billion, slightly more than the $177.5 billion economists had expected.

The Obama administration is projecting that when the current budget year ends on Sept. 30, the imbalance will total $1.84 trillion, more than four times last year's record-high.

Massive amounts of government spending to combat the recession and stabilize the U.S. financial system have pushed the deficit higher. The cost of wars in Iraq and Afghanistan, along with depleted government tax revenues, are also major factors.