Report expected to show federal deficit tripled

The federal budget deficit likely surged again last month as the government struggles with the costs of the financial crisis and a severe recession.

Economists surveyed by Thomson Reuters expect the deficit in March hit $150 billion, which would be more than three times higher than the year-ago level.

The Treasury Department is scheduled to release the report Friday at 2 p.m. EDT.

If economists are correct, the amount of red ink through the first six months of the current budget year would total $915 billion, keeping the government on track to reach the administration’s projections for an annual deficit of $1.75 trillion. That would far exceed the current record holder, a deficit of $454.8 billion recorded last year.

The imbalance is surging because the government is providing massive amounts of money to deal with the worst U.S. financial crisis in more than seven decades.

The spending includes tapping a $700 billion bailout fund that Congress passed last October and additional resources being used to prop up mortgage giants Fannie Mae and Freddie Mac, which the government took over in September.

In addition, the recession is cutting into tax receipts and forcing the government to spend more on benefit programs like unemployment insurance and food stamps.

The Congressional Budget Office estimated last month that President Barack Obama’s budget proposals would produce $9.3 trillion in deficits over the next decade, a figure $2.3 trillion higher than the estimates in the administration’s first budget proposal in February.

The outlines of Obama’s ambitious economic agenda won congressional approval last week when Democrats in both chambers passed spending plans for the 2010 budget year that begins in October.

The congressional budget blueprints would permit work to begin on the central goals of Obama’s presidency. Those objectives include an expansion of health coverage for the uninsured, increased support for education and an effort to reduce pollution blamed for global warming.

The CBO, in its review of the Obama budget, projected the administration’s proposals would generate deficits averaging almost $1 trillion annually over the decade ending in 2019.

The administration said it remained confident that its forecasts for declining deficits in coming years could be achieved. Private economists have faulted the administration’s deficit projections for relying on economic forecasts they believe are too optimistic.

The administration projects that after hitting $1.75 trillion this year, the deficit will dip to $1.17 trillion in 2010 and to $533 billion in 2013, fulfilling Obama’s pledge to cut the deficit he inherited in half by the end of his current term in office.