WASHINGTON, April 12-- Although the U.S. federal budget deficit declined to 65.4 billion dollars in March, it marked the 18th consecutive month of fiscal imbalance, according to a report released by the Treasury Department on Monday.

The March figure, matching economists' expectation of 65 billion dollars, is much better than the 221 billion dollars red ink in February. It is also compared to a 191.6 billion dollars imbalance a year ago.

The non-partisan Congressional Budget Office, in a report issued April 8, projected a March deficit of 62 billion dollars.

Last month, U.S. federal revenue rose to 153.36 billion dollars. It was the second consecutive increase after declining for 21 straight months.

Spending for the government totaled at 218.74 billion dollars in March, a 32 percent drop from a year ago.

Since the start of the 2010 fiscal year on October 1, 2009, the budget deficit totaled 716.99 billion dollars at the end of March, eight percent less than the same six-month period a year earlier.

The deficit decline is better than the government's pessimistic forecast in February that the deficit would increase 10 percent on an annual basis in the first half of the fiscal year.

The department said that the reason for the deficit improvement in March reflects the government's lowered estimate of the total costs for the Troubled Asset Relief Program (TARP), a 700-billion- dollar bailout plan for financial firms.

Without the reduction in TARP costs of 114 billion dollars, the March deficit would have approached the same level of last year.

The Treasury is still projecting that the budget deficit for the 2010 fiscal year ending September will surpass last year's historic high level of 1.4 trillion dollars.

In his budget plan proposed to the Congress in February, President Barack Obama projected a 1.56-trillion-dollar federal deficit in fiscal year 2010. That represents 10.6 percent of the U. S. gross domestic product, making it the biggest by that measure since World War II.

Statistics showed that the U.S. economy is on the track of recovery.

According to the government's latest data, the U.S. gross domestic product, the broad measure of overall economy, increased 5.6 percent in the fourth quarter of 2009 after a 2.2 percent of growth in the previous quarter.

"The economy is gradually, but definitely getting stronger. We are coming back, and we are coming back faster and stronger than most people predicted," Treasury Secretary Tim Geithner said on March 31.

"We are beginning to turn the corner ... the worst of the storm is over," President Obama commented on the March unemployment rate, which was released on April 2.

As the economy is rebounding, more and more economists suggest the Obama administration tackle the debt issue seriously as soon as possible.

They argue that the U.S. fiscal policy will not be sustainable without making substantial changes as the recent case of sovereign debt crisis in Greece shows.

Greece, one of the Euro zone countries, is at the brink of fiscal collapse as a result of years of irresponsible policy.

Paul Krugman, the Nobel laureate economist said that the Greek lesson for the U.S. is that "we should be fiscally responsible."

Even Federal Reserve Chairman Ben Bernanke warned last week that the U.S. Congress and the White House need to work on a plan to whittle down record-high budget deficits, the most noticeable longer-term challenge that the country is facing.

"To avoid large and unsustainable budget deficits, the nation will ultimately have to choose among higher taxes, modifications to entitlement programs such as Social Security and Medicare, less spending on everything else from education to defense, or some combination of the above," Bernanke said.