April 12, 2011 / 6:26 PM / 7 years ago

UPDATE 1-US posts record $829 bln half-FY deficit

(Recasts, adds background)

WASHINGTON, April 12 (Reuters) - The United States spent more than twice what it took in last month, raising the federal deficit to a record $829 billion for the first half of the fiscal year that began in October.

The Treasury Department on Tuesday said the United States posted a monthly budget deficit of $188 billion in March, the second highest shortfall of any March outsized only by the $192 billion gap posted in March 2009.

The cumulative deficit through the first half of fiscal 2011, which began Oct. 1, was a record $829 billion, about 16 percent higher than the $717 billion shortfall in the first half of last year.

President Barack Obama on Wednesday is expected to outline a long-term plan for deficit reduction in preparation for big U.S. spending battles ahead.

Obama and House of Representatives Speaker John Boehner last week narrowly averted a government shutdown when they struck a deal on how to spend taxpayer dollars for the fiscal year started last October.

Another much larger fight over the budget looms large as the government could hit the current $14.3 trillion limit on its borrowing authority by mid-May. It will need Congress to approve another increase in that debt ceiling.

The monthly shortfall was just shy of the $189 billion forecast of economists polled by Reuters. (Reporting by Corbett B. Daly; Editing by Chizu Nomiyama)

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