U.S. budget deficit drops to 65.4 billion dollars in March

08:23, April 13, 2010      

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The U.S. federal budget deficit declined to 65.4 billion dollars, compared to a 191.6 billion dollars imbalance a year ago, reported the Treasury Department on Monday.

The March figure, matching economists' expectation of 65 billion dollars, is much better than the 221 billion dollars red ink in February.

The department said that the reason for the improvement is the government's lowered estimate of the total costs for the Troubled Asset Relief Program (TARP), a 700-billion-dollar bailout plan.

Without the reduction in TARP costs of 114 billion dollars, the March deficit would have approached the same level of last year.

The Treasury is still projecting that the budget deficit for the 2010 fiscal year ending September will surpass last year's historic high level of 1.4 trillion dollars.

In his budget plan proposed to the Congress in February, President Barack Obama projected a 1.56-trillion-dollar federal deficit in fiscal year 2010.

As the economy is recovering, more and more economists suggest the Obama administration tackle the debt issue seriously as soon as possible.

Even Federal Reserve Chairman Ben Bernanke warned last week that the U.S. Congress and the White House need to work on a plan to whittle down record-high budget deficits, the most noticeable longer-term challenge that the country is facing.

"To avoid large and unsustainable budget deficits, the nation will ultimately have to choose among higher taxes, modifications to entitlement programs such as Social Security and Medicare, less spending on everything else from education to defense, or some combination of the above," Bernanke said.



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