Tags: US | Budget | Deficit

Budget Deficit on Track to Exceed $1 Trillion

Wednesday, 11 May 2011 03:31 PM

 

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WASHINGTON (AP) — The government is taking in more tax revenue as the economy improves, but not nearly enough to keep the federal budget deficit from exceeding $1 trillion for a third straight year.

The deficit for April dropped to $40.5 billion, half the imbalance from the same month last year, the Treasury Department reported Wednesday. Tax receipts were up 45 percent last month compared to the same month one year ago.

Still, the deficit is on pace to grow to $1.4 trillion in this budget year, according to the latest estimate from the Congressional Budget Office. That would nearly match the record $1.41 trillion deficit hit in 2009.

The deficit through the first seven months of this budget year, which began Oct. 1, totaled $869.9 billion last month. Before 2009, that would have ranked as the highest full-year deficit of all time.

Soaring deficits are putting pressure on Congress and President Barack Obama to agree on a long-term plan to trim federal spending. But the White House and Democrats also want to trim the deficit by ending tax cuts for the wealthy, which were first passed when President George W. Bush was in office and extended this past year by Obama.

Republicans reject that approach, calling it a tax increase. Their plan would focus exclusively on cutting spending while cutting taxes even further for the wealthy.

The monthly reports this year have shown that the revenue losses are turning around, reflecting the fact that unemployment, while still high, has been declining. More people working means more tax revenue for the government.

Through April, government revenues totaled $1.31 trillion, up 9.2 percent from the seven months through April of 2010. The increase included the big jump in income tax payments received by the government from individuals filing in April and also a gain in corporate tax payments.

Government spending totaled $2.18 trillion through April, a 9 percent increase over the same period a year ago. One of the fastest-rising categories was interest on the government's debt held by the public, which rose 13.1 percent to $139.3 billion through the first seven months of this budget year.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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