Budget Deficit in U.S. Swelled to $192.3 Billion in March

The U.S. budget deficit surged in March as the shrinking economy cut tax payments by companies and individuals and the government spent more.

The excess of spending over revenue climbed to $192.3 billion, compared with a gap of $48.2 billion in the same month a year earlier. Spending increased to $321.2 billion and revenue fell 28 percent to $129 billion.

The deficit six months into the 2009 fiscal year already exceeds the record set in the entire previous year. Rising job losses and subdued spending are cutting into tax receipts at the same time that the government commits billions of dollars to bolster the economy, now in its second year of a recession.

“A weaker labor market, slowing economy and weaker corporate profits will provide some downward pressure on the receipts side of the equation in coming months,” Maxwell Clarke, chief U.S. economist at IDEAglobal in New York, said before the report.

Economists surveyed by Bloomberg News forecast a March deficit of $165 billion, according to the median estimate of 28 projections. Projections ranged from deficits of $137.3 billion to $200 billion.

During the first half of fiscal year that began Oct. 1, the country’s deficit swelled to a record $956.8 billion, compared with a $313 billion shortfall during the same period a year earlier.

Corporate tax receipts totaled $56.2 billion through March, down from $129.5 billion in the first half of fiscal 2008, the Treasury said. Individual income tax collections are down 15 percent so far this fiscal year to $429.7 billion compared with $503.5 billion in the year-earlier period.

Projected Gap

The deficit in 2008 totaled a record $454.8 billion. The Congressional Budget Office estimated on March 20 that the gap will swell to $1.85 trillion this fiscal year.

Almost half of the $94.2 billion, or 41 percent, surge in government spending last month compared with March 2008 reflected cash infusions to Fannie Mae and Freddie Mac, the two biggest mortgage underwriters. Fannie Mae received $15.2 billion last month and Freddie Mac got $30.8 billion, the government said.

President Barack Obama in February signed into law a $787 billion stimulus program that he pledged will preserve or create 3.5 million jobs. Since then, the administration has also committed funds to help U.S. automakers and to spur investors to buy real estate assets that are clogging banks’ balance sheets.

Obama has signed a $410 spending bill to provide funding for most government operations through Sept.30.

Obama Plan

The U.S. House of Representatives and the Senate last week approved drafts of Obama’s 2010 budget that largely adhere to the administration’s priorities. The House approved a $3.55 trillion plan on April 2 that echoes Obama’s calls for revamping the health-care system, rewriting education policies and reining in global warming.

Obama said last week the U.S. needs to reduce its deficit after the economic crisis passes.

“Once we have stabilized the economy we are going to have to bring these huge deficits down,” Obama told reporters April 2 in Baden-Baden, Germany.