Federal Deficit Shrank $125 Billion But Still Huge

Updated: Thursday, 07 Oct 2010, 5:23 PM MDT
Published : Thursday, 07 Oct 2010, 5:23 PM MDT

(NewsCore) - The fiscal 2010 federal budget deficit is expected to be slightly less than $1.3 trillion and actually shrank by $125 billion from the 2009 shortfall, according to estimates in a report released Thursday by the Congressional Budget Office.

The 2010 deficit, the second highest since 1945 (the highest being 2009's), was estimated to equal 8.9 percent of gross domestic product, the CBO said, down from 10 percent of GDP in 2009.

The CBO's deficit estimate is based on data from the Daily Treasury Statements. The Treasury Department will report the actual fiscal 2010 deficit later this month.

Spending in fiscal 2010 was estimated to have fallen two percent from the year before, but the decrease was thought to have been a result of the end of the Troubled Asset Relief Program (TARP) and lower payments to federal deposit insurance and government-run mortgage giants Fannie Mae and Freddie Mac.

Excluding those programs, spending in fiscal 2010 rose by nine percent, "somewhat faster than in recent years," the report stated.

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