Wednesday, September 14, 2011

Federal deficit totaled $1.23 Trillion through August

The federal budget deficit reached $1.23 trillion in August. The third straight $1 trillion-plus deficit adds pressure on Congress and the White House to reach agreement on a long-term plan to trim government spending.

The Treasury Department said the deficit grew by $134.2 billion last month. At that rate, the nonpartisan Congressional Budget Office projects the deficit will total $1.28 trillion when the budget year ends in September. That would nearly match last year's $1.29 trillion imbalance and come in below the record $1.41 trillion hit in fiscal 2009.

A congressional panel is seeking agreement on $1.2 trillion in savings over the next decade. CBO Director Douglas Elmendorf warned the committee on Tuesday that spiraling interest payments could swamp the government's ability to pay for its operations and could spark a financial crisis if nothing is done.

President Barack Obama is expected to send the committee his recommendations to trim the deficit later this month. They will also include a series of tax hikes to pay for his $447 billion job-creation proposal. more