The federal budget deficit fell to $152.1 billion in the 1989 fiscal year that ended Sept. 30, some $3 billion below last year's $155.2 billion shortfall, the Treasury announced Friday.

The drop in the deficit was due in part to federal regulators spending only $9.1 billion of $20 billion intended for the savings and loan bail-out before the fiscal year ended.Those funds will be spent during the current fiscal year, meaning it will be that much harder to reduce the 1990 deficit.

"It is only a modest reduction in the deficit, and we are certainly not in any way saying we are satisfied with it," budget director Richard Darman said of the 1989 results, adding later that "the good news is the deficits are not heading up."

The deficit was well above the Gramm-Rudman deficit reduction target of $136 billion for the 1989 fiscal year and would not have met that target even without the savings and loan crisis.

But there was no mandatory se-questor of 1989 funds because as of October 1988, the government was projected to better the sequestration trigger level for the year of $146 billion.

View Comments

The budget shortfall was better than the $164.1 billion estimate made by the administration last February but worse than the $148.3 billion revised estimate in the administration's midyear economic review.

Join the Conversation
Looking for comments?
Find comments in their new home! Click the buttons at the top or within the article to view them — or use the button below for quick access.