U.S. posts $42.63 billion budget deficit in January

17. February. 2010

WASHINGTON - The United States posted a smaller-than-expected $42.63 billion budget deficit in January, Treasury Department data showed on Wednesday, due in part to a drop in spending caused by a shift in the calendar.

The January deficit fell short of analysts' consensus forecast in a Reuters poll for a $47 billion budget gap and compares with a $91.41 billion deficit posted in December and a $63.46 billion gap for the same period a year ago.

In January, outlays fell to $247.88 billion from $310.33 billion in December and compared with $289.55 billion in January 2009, the department said.

Receipts totaled $205.24 billion from $218.92 billion in December and were the lowest for a January since 2005, the department said. Receipts in January 2009 stood at $226.09 billion.

The department said that because the January 1 holiday fell on a Friday this year, some spending had been shifted from January into December 2009.

The deficit over the four months of the fiscal year to date now stands at a record $430.69 billion compared with a deficit of $395.94 billion for the same four-month period a year ago.

Earlier this month, the White House forecast a $1.56 trillion budget deficit in 2010, or 10.6 percent of gross domestic product. This compares with a budget shortfall of $1.41 trillion in fiscal 2009.

But for 2011 the White House expects the budget deficit to shrink to $1.27 trillion, or 8.3 percent of GDP.

To combat the ballooning deficit, President Barack Obama will sign an executive order on Thursday to establish a bipartisan commission to propose ways to tackle it.

Obama will name Erskine Bowles, former chief of staff to President Bill Clinton, and former Republican Senator Alan Simpson to serve as co-chairs of the body.
[Reuters]