U.S. budget deficit widens, above $1 trillion for third year

WASHINGTON (Reuters) - The U.S. budget gap widened slightly in fiscal 2011, staying above $1 trillion (631.9 billion pounds) for a third straight year and providing fodder for a political battle over taxes and spending ahead of next year's presidential election.

The Treasury Department on Friday report comes just over a month after an epic showdown over the nation's debt ceiling that pushed the United States close to a debt default and led to a downgrade of America's prized AAA credit rating.

The shortfall in September, the final month of the fiscal year, widened to $64.57 billion compared to the same month a year earlier, although it came in at a few billion dollars less than economists had projected.

(Reporting by Pedro Nicolaci da Costa)