WASHINGTON, July 14 (RIA Novosti) - The U.S. budget deficit has ballooned this financial year to exceed $1 trillion for the first time, the Treasury Department has announced.

The shortfall grew by $94.316 billion in June to total $1.086 trillion since the financial year started in September.

The massive gap between income and expenditure has been caused by decreasing tax revenues as people and companies struggle with the financial crisis and increased spending to bailout failing firms and boost the economy, coupled with the continuing costs of military operations in Iraq and Afghanistan.

The 2008 deficit of $454.8 billion was itself a record and this year's figure could double by September, leading analysts to fear that the vast borrowing required could threaten the country's financial stability.

U.S. President Barack Obama in February signed a law on measures to fight the economic crisis worth $787 billion in tax breaks and budget spending.