US deficit hits $1.1 trillion|Business News

US deficit hits $1.1 trillion|Business News

Washington: The US budget deficit has hit a staggering $1.1 trillion putting the federal government on track to finish the 2011 fiscal year with the second-largest gap between its incoming and outgoing cash.

In July alone, the government spent $129.38 billion more than it took in, down from $165 billion a year earlier, the Treasury Department said Wednesday. All but $8 billion of that $36 billion difference came from one-time transactions made in 2010.

In fiscal 2010, the deficit for the first 10 months of the year was $1.169 trillion.

The Obama administration has forecast that the deficit for the fiscal year, which ends Sep 30, would total $1.65 trillion. But unless spending is significantly higher or revenues are significantly lower in August and September, the total for the year will likely be below that level, Politico news site focusing on Presidential and Congressional politics noted.

The Congressional Budget Office, meanwhile, has projected that the deficit will hit $1.4 trillion this year.

Before 2009, the deficit had never surpassed $1 trillion during a single year, Politico said. This year's deficit is on track to surpass last year's $1.29 trillion but bring in just below the $1.41 trillion budget deficit the federal government amassed in 2009.

Ahead of that, the record high for deficit spending came in 2008, President George W. Bush's final full year in office, when it totalled $454.8 billion, Politico said.

The last budget surplus came in 2001, when federal revenues were $127 trillion greater than spending, it said. At that time - before the Bush administration launched wars in Iraq and Afghanistan - surpluses were expected to hit $5.6 trillion in the coming decade.

Source: IANS