Record deficit lower than expected

WASHINGTON – The White House plans to announce the federal deficit will be about $262 billion less than officials predicted earlier this year – in part because the administration has provided less aid than expected to Wall Street.

The federal deficit this year will total $1.58 trillion, a senior White House official said late Wednesday. That’s three times more red ink than last year. The official spoke on the condition of anonymity to discuss the report before its release next Tuesday.

The nonpartisan Congressional Budget Office is expected to release its mid-session review the same day. It estimated in June that it expected a deficit of $1.825 trillion.

The report for the budget year that ends Sept. 30 also will predict Washington to spend $3.653 trillion this year, the official said. Revenue, however, would reach only $2.074 trillion.

The new deficit numbers are record shattering but would give the administration the opportunity to say that its policies have avoided a more extreme financial crisis. Still, the deficit amount is a tremendous obstacle for an administration trying to undertake massive policy overhauls in health care and the environment.