CBO says fiscal 2009 mid-year deficit at $953 billion

CBO has put the federal budget deficit for the first half of fiscal 2009 at $953 billion, which includes $290 billion for the Troubled Asset Relief Program.

CBO's estimate, released Monday, is $640 billion more than the deficit recorded through March 2008. The estimate comes after the CBO projected last month that the fiscal 2009 deficit would total $1.7 trillion, or $1.8 trillion if President Obama's proposals for the fiscal year are enacted. Federal receipts were estimated to be about 30 percent less than in March 2008, with more than half of the drop spurred by a decline in net corporate income tax receipts.

However, the decline in corporate income tax receipts may be the result, in part, of firms applying current-year losses to obtain refunds of taxes paid in previous years. Federal outlays were $89 billion, or 39 percent more than those last March, according to CBO, with a $46 billion cash infusion to Fannie Mae and Freddie Mac -- now controlled by the government -- accounting for about half the increase.

Another $10 billion was lent to credit unions by the Treasury, and Medicaid spending rose by $10 billion, including $8.5 billion that was due to provisions in the economic stimulus legislation enacted in February.