The recession has dramatically reduced the U.S. government's tax revenue at a time when President Barack Obama and Congress are attempting a major expansion of healthcare and other programs. Tax revenues are on pace to plunge 18 percent this year, the biggest annual decline since the Great Depression, while the federal budget deficit expands to a record $1.8 trillion, according to an Associated Press analysis. Individual income-tax revenue is down 22 percent from a year ago, and corporate income-tax revenue is down 57 percent. Tax revenue from the Social Security pension plan could decline for only the second time since 1940, and tax revenue for the Medicare healthcare plan for the elderly is on pace to drop for only the third time. The last time the government's finances were so dire was in 1932. While much of Washington is focused on how to pay for new programs like overhauling healthcare - at a cost of $1 trillion over the next decade - existing programs are being affected by the budget crisis. Social Security is in danger of running out of money earlier than the government projected a few months ago. Highway, mass-transit, and airport projects are also at risk because fuel and industry taxes are declining. The U.S. national debt currently exceeds $11 trillion, and legislation recently completed by the House of Representatives would increase domestic agencies' spending by 11 percent and military spending by 4 percent in 2010.
