Gov't Runs April Deficit for First Time Since '83

The federal government ran a deficit in the month of April for the first time in 26 years, pushing the red ink so far this budget year to a record $802.3 billion.

The Treasury Department said Tuesday the deficit for April was $20.9 billion, a sharp contrast from the surplus of $159.3 billion in the same month last year. It also was slightly more than the $20 billion deficit economists had expected.

For the budget year that began Oct. 1, the imbalance totals $802.3 billion, keeping the country on track to register the first $1 trillion annual deficit in U.S. history. And the Obama administration made an accounting change on bailout payments or the deficit already would have been at nearly $1 trillion.

The administration on Monday raised its deficit estimate for the year to $1.84 trillion, from the $1.75 trillion it estimated less than two months ago.

The government normally runs surpluses in April as Treasury's coffers swell with people paying their annual tax bills by the April 15 deadline. But the deficit is being driven higher by the billions of dollars being spent to rescue the financial system from its worst crisis since the 1930s and deal with the worst recession in decades.

The recession also has boosted government outlays for benefit programs like unemployment insurance and food stamps while slashing tax revenues.

The administration made revisions to the deficits reported from October through March to reflect a change in how it was accounting for the bailout payments. The Bush administration recorded each payment to a bank or auto company getting bailout support on a dollar-for-dollar basis.

However, the Obama administration said it was changing the accounting process to a "net present value" basis, which means it assumes that the government is getting an asset when it provides loans to the banks and auto companies. Based on the new accounting method, the size of the deficit from October through March fell about $175 billion.