The federal budget deficit continued to spiral higher, reaching $1.3 trillion through the first 10 months of fiscal 2009, the nonpartisan Congressional Budget Office said Thursday.

In its monthly assessment of the state of the federal government's fiscal picture, the CBO said the deficit is now running $880 billion higher than the comparable period in fiscal 2008.

The CBO has forecast the deficit will reach $1.8 trillion for the complete fiscal year. The federal government's fiscal year ends Sept. 30.

The agency said the deficit figure includes $169 billion related to the Treasury financial rescue program, the Troubled Asset Relief Program, and another $83 billion in payments to prop up Fannie Mae (FNM) and Freddie Mac (FRE).

This compared to $147 billion related to TARP and $87 billion for the two housing guaranty agencies through June, it said.

So far, $125 billion in spending increases and lower revenues have been recorded stemming from the $787 billion economic stimulus plan, the CBO said.

In June, the Treasury reported a deficit of $94 billion, $2 billion less than the CBO had estimated it would. For July, the agency forecast a federal budget deficit of $181 billion.

Spending on unemployment benefits is more than 2.5 times what was spent through the first 10 months of fiscal 2008, the CBO said, because of markedly higher unemployment and changes to legislation that extended and boosted payments.

-By Corey Boles, Dow Jones Newswires; 202-862-6601; corey.boles@dowjones.com