Deficit triples in fiscal 2009, reaches 10 percent of GDP

The Congressional Budget Office said on Wednesday that the deficit for fiscal 2009, which ended Sept. 30, totaled about $1.4 trillion, a $950 billion increase over the shortfall posted in fiscal 2008.

The deficit now represents 9.9 percent of the gross domestic product, which is up from 3.2 percent in fiscal 2008. That percentage is the highest shortfall, relative to the size of the economy, since 1945, CBO said.

Revenues in fiscal 2009 were nearly $420 billion, or 17 percent, below receipts in fiscal 2008 and totaled about 15 percent of GDP, the lowest level in over 50 years.

Outlays increased by over $530 billion, or 18 percent, in fiscal 2009, to nearly 25 percent of GDP, also the highest level in more than 50 years.

About half of the spending increase, roughly $245 billion, resulted from outlays for the Troubled Asset Relief Program, enacted last year to stabilize the financial system, and payments to Fannie Mae and Freddie Mac, which were taken over by the government last year.

House Budget Committee Chairman John Spratt, D-S.C., blamed the surge in the deficit on the fiscal policies of the George W. Bush administration and a severe economic recession.

"It should be remembered that FY09 began during the Bush Administration, which left in its wake the worst recession since the 1930s, including a sharp plunge in revenues," Spratt said in a statement. "As a result, a large part of the FY09 deficit results from policies undertaken by the Bush Administration, including the cost of the TARP. Much of the rest stems from the cost of efforts like the [stimulus], which was necessary to keep a faltering economy from becoming an economic meltdown."