The Congressional Budget Office (CBO) has released its monthly budget review this morning that estimates a deficit of $953 billion for the first half of FY 2009. This is a whopping $640 billion more than for the same period in FY 2008.

This monthly budget review is a bit different than other estimates because CBO believes that TARP spending should be handled differently than the Treasury Department. CBO Director Douglas Elmendorf explains on his blog:

Budget accounting issues are clouding the deficit forecasts for this year. The above estimate of this year’s deficit to date includes outlays of about $290 billion for the Troubled Asset Relief Program (TARP). Although the Treasury has been recording most spending for the TARP on a cash basis, CBO believes that the budget should record the program’s activities on a net present-value basis adjusted for market risk. Using that approach, CBO estimates that outlays of $140 billion should be recorded for the TARP through March. That approach would yield an estimated deficit of $803 billion for the first half of the year.

The CBO review also reports than revenues were down about 30 percent compared to last year, with corporate income taxes dropping sharply and that spending was 39 percent higher, mostly due to cash infusions of $46 billion into Freddie Mac and Fannie Mae, which are now government run.

CBO: Monthly Budget Review