Report expected to show federal deficit tripled

APR 10, 2009
By  Bloomberg
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.

Latest News

The 2025 InvestmentNews Awards Excellence Awardees revealed
The 2025 InvestmentNews Awards Excellence Awardees revealed

From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.

Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty
Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty

Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.

Edward Jones joins the crowd to sell more alternative investments
Edward Jones joins the crowd to sell more alternative investments

“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.

Record RIA M&A activity marks strong start to 2025
Record RIA M&A activity marks strong start to 2025

Sellers shift focus: It's not about succession anymore.

IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients
IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients

Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.