UPDATE 2-US budget gap soars in first half of fiscal 2009

Fri Apr 10, 2009 9:04pm BST
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(Adds details on deficit estimates, spending plans)

By David Lawder

WASHINGTON, April 10 (Reuters) - The United States posted a record $956.8 billion budget deficit for the first half of fiscal 2009, more than triple the year-ago shortfall, as spending on financial and economic rescue programs ramped up, the Treasury Department said on Friday.

For March, the government recorded a deficit of $192.27 billion, a record for the month and nearly four times the year-ago gap of $48.21 billion.

March budget outlays ballooned to $321.23 billion, including $46 billion spent to inject capital into government-controlled housing finance companies Fannie Mae (FNM.N: Quote, Profile, Research) and Freddie Mac (FRE.N: Quote, Profile, Research) and $10.6 billion for federally subsidized unemployment benefits. The total outlays compared with $227.02 billion for March 2008.

The March outlays would have been even larger, but the federal government shifted about $15 billion of benefit payments into February because March 1 was a Sunday.

March receipts fell sharply as a rapidly deteriorating economy dried up tax revenue from individuals and businesses. Receipts for the month fell 28 percent to $128.96 billion from $178.82 billion a year earlier.

In addition to the capital support for Fannie and Freddie, the government purchased $17.38 billion of mortgage-backed securities from government-sponsored enterprises, marking a total of $119.2 billion for the first half of fiscal 2009, which started on October 1.

The nearly $1 trillion deficit in the first half of the fiscal year is consistent with some private forecasts that the fiscal 2009 shortfall will be in the $1.6 trillion to $2 trillion range, dwarfing the 2008 record of $454.8 billion.  Continued...

 
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