U.S. Budget Deficit Dips to $152 Billion in Fiscal ’89

The federal budget deficit declined slightly to $152.1 billion in fiscal 1989, mostly because the government spent only half as much as expected on the savings and loan bailout in August and September, it was announced today.

The budget gap for the fiscal year ending Sept. 30 represented a $3.1-billion improvement over the $155.2 billion in red ink recorded in 1988.

The deficit had hit a record $221.1 billion in 1986, before declining to $149.7 billion in 1987 as the Gramm-Rudman deficit reduction law pressured the Ronald Reagan Administration and Congress into holding down spending.

However, since then progress has stalled and 1989 marks the third consecutive year of essentially the same budget gap.

In August, the government projected a $167.2-billion budget deficit for the fiscal year, but the red ink came in under projections. The government had planned to spend $18.8 billion on savings and loan rescues, but spent only $9.1 billion, said a joint report by the Treasury Department and the Office of Management and Budget.

The new agency created Aug. 9 for S&L; bailouts, the Resolution Trust Corp., was unable to complete the sale of five large S&Ls; before Sept. 30. That will shift those expenditures into the current fiscal year, inflating the 1990 deficit.

In September, the government spent $105.4 billion and collected revenue of $99.2 billion, producing a deficit of $6.2 billion. In September, 1988, the government recorded a surplus of $10.2 billion.

Spending in the 1989 fiscal year totaled $1.14 trillion, while revenues added up to $990.8 billion.