The U.S. budget deficit for 2009 was revised lower yesterday by the Obama administration and the Congressional Budget Office, though long-term deficits remain a concern as market participants said they could push Treasury yields higher and municipal yields with them.

CBO director Douglas W. Elmendorf said the projected $1.587 trillion deficit as a percentage of gross domestic product will be 11.2% in 2009, almost twice the previous record in the post-WWII era. But it was revised downward by $80 billion from the March projection, based on a projected $203 billion drop in the budget outlay for the Troubled Asset Relief Program, which was enacted last year.

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