The U.S. government posted its third consecutive annual budget deficit in excess of $1 trillion in the fiscal year ended Sept. 30.
The shortfall registered $1.3 trillion in fiscal 2011, up from $1.29 trillion in 2010 and the second-highest on record, according to Treasury Department data issued today in Washington. It reached $1.42 trillion in 2009, the highest ever. The September gap widened to $64.6 billion from $34.6 billion in the same month last year.
“There is a lot of red ink on the government’s balance sheet and Congress appears clueless on how to make it disappear,” Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said before today’s report.
A special 12-member congressional committee has been tasked with finding $1.5 trillion in savings over the next decade under the terms of the debt-ceiling deal reached in early August. If Congress fails to act on the group’s recommendations by Dec. 23, the compromise will trigger automatic cuts.
“It is going to be a long and painful process as the economy has slowed to the stall speed, and while you can’t grow your way out of your debts, it obviously helps speed up the timetable,” Rupkey said.
Spending rose 4.2 percent in fiscal 2011 from a year earlier to $3.6 trillion, according to the Treasury. Revenue climbed 6.5 percent to $2.3 trillion.
Before the release of the annual statistics, the White House Office of Management and Budget and the non-partisan Congressional Budget Office both estimated a fiscal 2011 budget of $1.3 trillion.
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