U.S. $1.3 trillion in the red

WASHINGTON, Oct. 15 (UPI) -- The federal deficit for fiscal year 2010 was $1.3 trillion, the second consecutive year the deficit topped the trillion-dollar mark, U.S. officials said.

The deficit, as a percentage of the gross domestic product, fell to 8.9 percent from 10 percent in fiscal year 2009, U.S. Treasury Secretary Timothy Geithner and Acting Director of the Office of Management and Budget Jeffrey Zients said in a joint statement.

The FY2010 figure was the second-largest deficit on record, second only to last year's $1.4 trillion, the Treasury Department said. Much of the year, the 2010 deficit was projected to top 2009's.

"Careful stewardship" of emergency funding activities, such as the Troubled Asset Relief Program, helped the deficit be less than estimated for FY 2010, which ended Sept. 30, Geithner and Zients said.

The TARP outlays of $9 billion in FY 2010 were $25.9 billion less than estimates from July, the officials said. Aid to the Federal National Mortgage Association and Federal Home Loan Mortgage Corp. loan programs was $52.6 billion in FY 2010, $16.4 billion less than the most recent forecast, the two officials said.

"By carefully managing the emergency initiatives to stop the financial panic and by accelerating our exit from those investments, we have significantly lowered the cost to taxpayers, bringing the costs of the financial rescue down by more than $240 billion this year," Geithner said. "However, we still have a long way to go to repair the damage to the economy and address the long-term deficits caused by the crisis."

Zients said the fiscal year 2012 budget policy process would still enforce the three-year, non-security discretionary spending freeze and "continue our efforts to put the nation on firm fiscal footing."

Even though the data indicate the country is moving in the right direction, U.S. President Barack Obama "thinks we still need to do a lot of work in order to get our fiscal house in order," said White House spokesman Bill Burton.

"He's taken a number of steps to do that already," Burton said. "And he's going to continue to work hard to make sure that we're on the right track."