Federal budget deficit reaches $485b

Amid talk about the multi-billion dollar stimulus package proposed by President-elect Barack Obama, new Treasury figures reveal that the federal budget deficit has already reached a record $485.2 billion for the first three months of fiscal 2009.

This number sets a new high for a first-quarter deficit and is also greater than the figure for all of fiscal year 2008, which stood at $455 billion.

There are a number of factors at play that have contributed to the rise. Spending on bailouts, economy recovery programs and capital investments began during this period, while income tax revenues have gone down due to job cuts.

According to the Associated Press, Peter Orszag, who has been nominated to lead the White House Office of Management and Budget, predicted large deficits to continue for years.

He told the Senate Budget Committee that the U.S. was likely to face deficits equaling approximately 5 percent of the economy for up to a decade.

In December alone, the country’s deficit grew by $83.6 billion, the Treasury said. Since bailout spending began, it has been issuing bonds extremely quickly to pay for the spending, CNN Money reports.