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Budget deficit on track to beat last year’s record

But Jan. figures less than expected

By Martin Crutsinger
Associated Press / February 18, 2010

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WASHINGTON - The federal deficit through the first four months of the budget year is running at a record-breaking pace even though the deficit in January was slightly smaller than expected.

The Treasury Department said yesterday that the deficit for January totaled $42.63 billion. That left the total of red ink so far this budget year at $430.69 billion, 8.8 percent higher than last year, when the deficit soared to an unprecedented level of $1.42 trillion.

The $42.63 billion deficit for January was down from a $63.46 billion deficit in January 2009 and below the $47 billion forecast of private economists.

Obama, in sending Congress a budget plan on Feb. 1, projected that this year’s deficit would hit $1.56 trillion and would remain above $1 trillion for three years. He forecast the 2011 deficit, for the budget year that begins next Oct. 1, would total $1.27 trillion.

The administration marked the anniversary yesterday of the passage of the $787 billion economic stimulus bill, maintaining that it has worked to stave off a second Great Depression while acknowledging that more must be done to return people to work.

The administration says it will begin to tackle the deficit in 2011. In his budget, the president offered a down-payment on deficit reduction, a three-year freeze on discretionary government spending outside of defense and homeland security.

Obama plans to announce today the creation of a deficit panel headed by Erskine Bowles, a former White House chief of staff in the Clinton administration, and former senator Alan Simpson, a Wyoming Republican.