Deficit | featured news

European finance ministers said in a statement that Greece must show by March 16 that it is on track to cut its deficit.

Goldman Sachs helped the Greek government to mask the true extent of its deficit with the help of a derivatives deal that legally circumvented the EU Maastricht deficit rules. At some point the so-called cross currency swaps will mature, and swell the country's already bloated deficit.

President Barack Obama renewed his pledge on Saturday to make job creation his top priority in 2010 but said it was also critical to rein in a record budget deficit that threatened economic recovery.

California faces a nearly $21 billion budget gap over the next year and a half, extending a fiscal crisis that already has led to steep cuts to public schools, social services and health programs.

The White House and Congressional leaders are weighing options for reducing the federal deficit, including a bipartisan commission that could force tax increases and spending cuts.

The United States must reduce its budget deficit and Asian nations must encourage more consumption to prevent a recurrence of the global imbalances that contributed to the financial crisis, Federal Reserve Chairman Ben Bernanke said Monday.

The deficit is the largest relative to the size of the economy since 1945, underscoring the challenge to shrink the fiscal gap even as the White House considers more steps to stimulate a slow recovery.

The estimate, an increase from $7.1 trillion, was blamed on the unexpectedly deep economic downturn.

The Obama administration next week will project a federal budget deficit for fiscal 2009 of about $1.58 trillion, slightly less than previously predicted, a senior administration official said.

Nine months into the fiscal year, the federal deficit has topped $1 trillion for the first time.

The imbalance is intensifying fears about higher interest rates and inflation, and already pressuring the value of the dollar. There's also concern about trying to reverse the deficit -- by reducing government spending or raising taxes -- in the midst of a harsh recession.