U.S. Posts $176.36 Billion Deficit for October

By MEENA THIRUVENGADAM and DARRELL HUGHES WASHINGTON -- The federal government kicked off fiscal year 2010 by posting its widest-ever October budget deficit, the Treasury Department said Thursday. The $176.36 billion gap is more than $20 billion wider than the shortfall recorded in October 2008, driven up by lower tax receipts, stimulus-related revenue reductions and consistently high government outlays. Treasury's monthly budget statement shows receipts were $135.33 billion in October, down 18% from a year earlier and at the lowest level since October 2002. Meanwhile, outlays were $311.69 billion, down 3% from a year earlier and at their second-highest monthly level on record. The October deficit figure is wider than the Congressional Budget Office's estimate for a $175 billion deficit in the month and wider than the $165.9 billion expected by analysts surveyed by Dow Jones Newswires. The Treasury on Thursday also revised September's deficit to a slightly narrower $46.57 billion, from a previously reported $46.61 billion. Even with the revision, the U.S. in fiscal year 2009 posted a record total budget deficit of near $1.4 trillion -- three times its previous record. At the equivalent of 9.9% of gross domestic product, the figure is the widest U.S. deficit as a share of GDP since 1945. The staggering number has had U.S. Treasury Secretary Timothy Geithner pledging to rein in the deficit as the nation's economy recovers. The U.S. at this point is expected to post a fiscal year 2010 deficit similar to that posted in fiscal year 2009. The government paid $17.93 billion in net interest last month on the federal debt. Net interest on the federal debt excludes interest paid on nonmarketable government securities held by federal trust funds, such as Social Security. Write to Meena Thiruvengadam at meena.thiruvengadam@dowjones.com and Darrell Hughes at Darrell.Hughes@dowjones.com