$1.4 Trillion Deficit Limits Democrats' Agenda

WASHINGTON - The Treasury said the U.S. ran its biggest budget deficit since World War II, a record that promises to complicate Democrats' efforts to enact their agenda.

The Treasury Department reported that the deficit for the 2009 fiscal year ended Sept. 30 came in at about $1.4 trillion, or about 10 percent of the U.S.'s gross domestic product.

From health care to economic recovery to the Afghanistan war, the government's gloomy fiscal condition is constraining Democrats. Deficits also are looming large as a political issue in the 2010 campaign, as voters fret about the long-term consequences of mounting debt.

"I don't think I've seen this level of concern since 1992, when Ross Perot said we need to look under the hood and fix the engine," House Majority Leader Steny Hoyer of Maryland said in an interview Friday. "Government, individuals and businesses are all looking at their debt loads and recalculating."

Now Democrats find themselves on the defensive over deficits, partly as a result of the $787 billion stimulus they pushed through last winter.

On Friday, administration officials defended the stimulus as necessary to pull the economy back from the brink. They also cheered what they called the effects of economic stabilization and recovery, such as lower bailout costs and improving tax receipts, that helped reduce the huge 2009 deficit by 24 percent from earlier projections.

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