CBO Says Federal Deficit Hit Record $1.4 Trillion for Fiscal Year 2009

By Lindsey Ellerson

Oct 7, 2009 6:56pm

ABC News' Matthew Jaffe reports: The federal deficit reached a record $1.4 trillion in the 2009 fiscal year, according to an analysis released Wednesday by the Congressional Budget Office. The report is not the actual deficit figure, which will be released later this month by the Treasury Department. The year’s record-high deficit of $1.4 trillion equaled 9.9 percent of the nation’s gross domestic product, the CBO said. It is the highest shortfall relative to the size of the overall economy since 1945. The record shortfall stems from an increase in spending to stop the recession, bailout the financial industry, and take over mortgage giants Fannie Mae and Freddie Mac, as well as a decline in tax revenues. For the year, CBO said revenues dropped by $420 billion from 2008 receipts, a fall of 17 percent. The revenues totaled about 15 percent of GDP, the CBO found, the lowest level in more than half a century. Meanwhile, outlays were up $530 billion from a year earlier, an 18 percent increase, equal to nearly 25 percent of GDP, the highest level in more than half a century. The previous record deficit of $459 billion was set last year by the Bush administration. In August, the Obama administration projected the year-end deficit to be $1.58 trillion. The CBO’s estimate is based on daily Treasury statements and CBO’s own projections.

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