CORRECT: US Government Posted $20.91 Billion Total Budget Deficit In April

The U.S. budget deficit widened in April for the first time in 26 years as a bad economy shriveled government revenues.

The federal government posted a budget deficit of $20.91 billion in April, the seventh month of fiscal 2009, the Treasury Department said Tuesday.

It was the largest deficit ever in April and the first since 1983. Typically, the government is in the black that month because of income-tax payments flowing in before the April 15 deadline.

A survey of economists by Dow Jones Newswires forecast an April deficit of $19 billion. The Congressional Budget Office also estimated a deficit of $19 billion.

For the first seven months of fiscal 2009, the budget shortfall totaled $802.29 billion. In its budget statement, Treasury said it revised previous spending estimates for that period because of a change in accounting.

In the first seven months of fiscal 2008, the government ran a deficit of $153.47 billion. In all of fiscal 2008, the government ran a deficit of $454.80 billion, which was a record high.

The White House this week said the deficit would climb to a record $1.841 trillion this fiscal year, $89 billion larger than previously expected due to the weak economy and expensive financial rescue. The Obama administration expects the deficit to be $1.258 trillion in fiscal 2010, which begins in October. In its February budget overview, the White House predicted a $1.752 trillion budget gap in 2009 and a $1.171 trillion deficit next year.

Spending on government programs to bail out Wall Street and tax revenues shrunken by the economy's slump have helped boost the deficit into record turf this fiscal year, which began Oct. 1, 2008. Gross spending on the Troubled Asset Relief Program was $3.22 billion for April - and $117.92 billion for the year to date.

Also driving outlays and widening the deficit are traditional government programs to assist the jobless. The recession has cost 5.7 million jobs since beginning December 2007, Labor Department figures show.

April federal government spending totaled $287.14 billion, compared to $244.47 billion in April 2008. Interest payments on the national debt were $19.22 billion. Defense spending ran at $54.27 billion. Veterans benefits were $8.02 billion. Social Security totaled $56.65 billion. Jobless benefit outlays were $10.9 billion.

In February, President Barack Obama signed a $787 billion package meant to spur the economy. The economic relief is seen inflating the deficit as the year progresses.

The Treasury report Tuesday said it bought $11.51 billion in agency mortgage-backed securities during April; year to date, purchases totaled $130.70 billion. Treasury became the buyer of last resort for these bonds when it announced the takeover of Fannie Mae (FNM) and Freddie Mac (FRE) in early September. The bonds, guaranteed by Fannie and Freddie, play a critical role in the housing finance market. The yields on these bonds determine the mortgage rates that consumers pay on their home loans.

Year-to-date federal government spending totaled $2.06 trillion, compared to $1.70 trillion in the first seven months of fiscal 2008.

The monthly budget statement showed April federal government receipts totaled $266.2 billion, down from $403.8 billion a year earlier. Individual income-tax receipts totaled $136.7 billion, compared to $244.0 billion in April 2008. Corporate taxes totaled $14.5 billion, compared to $41.7 billion in April 2008.

Year-to-date federal government revenues totaled $1.26 trillion, compared to $1.55 trillion for the first seven months of fiscal 2008.

The Treasury said it plans to release budget data for May on June 10.

-By Jeff Bater, Dow Jones Newswires; 202 862 9249; [e-mail]