Federal budget deficit sets March record as it soars to $192.3B

WASHINGTON -- The Treasury Department said Friday that the budget deficit soared to $192.3 billion in March and is nearing $1 trillion just halfway through the budget year, largely because of mounting costs of the financial bailout and recession.

Last month's deficit, a record for March, was significantly higher than the $150 billion that economists expected.

The deficit already totals $956.8 billion for the first six months of the budget year, also a record for that period. The Obama administration projects the deficit for the entire year will hit $1.75 trillion.

A deficit at that level would nearly quadruple the previous yearly record of $454.8 billion set last year. The March deficit was four times the size of the imbalance in the same month last year.

Almost $300 billion provided to the nation's banks and other companies to cope with the most severe financial crisis in seven decades has pushed government spending higher.

The Treasury report said that through the end of March, $293.4 billion had been provided to support companies through the $700 billion bailout fund Congress passed last October. That support has been provided primarily to banks, although insurance giant American International Group and auto companies General Motors and Chrysler also have received aid.

Besides the bailout fund, Fannie Mae and Freddie Mac, semiprivate home mortgage giants, received $46 billion last month, bringing the total help to them to $59.8 billion since October. The government took control of both last September after they had suffered billions of dollars in losses on mortgage loans.

Through the first six months of the budget year that began Oct. 1, tax revenues have totaled $989.8 billion, down 13.6% from the year-ago period. The government's receipts have been reduced sharply by the recession, which is shaping up to be the longest of the post-World War II period. The downturn began in December 2007.

Government outlays totaled $1.95 trillion through March, 33.4% higher than the year-ago period. Besides higher payments for the financial rescue, the government is paying more in such areas as unemployment benefits and food stamps.