The federal deficit through the first four months of the budget year is running at a record-breaking pace even though the deficit in January was slightly smaller than expected.

The massive tide of red ink reflects the continued fallout from a deep recession and a severe financial crisis.

It highlights the formidable challenges President Barack Obama will face in trying to get the deficit down to more manageable levels.

The Treasury Department said Wednesday that the deficit for January totaled $42.63 billion. That left the total of red ink so far this budget year at $430.69 billion, 8.8 percent higher than last year when the deficit soared to an unprecedented level of $1.42 trillion.