Federal Deficit Tops $1 Trillion for Fourth Straight Year

Federal deficeitBy Martin Crutsinger

WASHINGTON (AP) - The federal budget deficit has topped $1 trillion for a fourth straight year. But a modest improvement in economic growth helped narrow the gap by $207 billion compared with last year.

The Treasury Department said Friday that the deficit for the 2012 budget year totaled $1.1 trillion. Tax revenue rose 6.4 percent from last year to more than $2.4 trillion, helping contain the deficit.

The government's revenue rose as more people got jobs and received income. Corporations also contributed more tax revenue than in 2011.

Government spending fell 1.7 percent to $3.5 trillion. The decline reflected, in part, less defense spending as U.S. military involvement in Iraq was winding down.

Barack Obama's presidency has now coincided with four straight $1 trillion-plus annual budget deficits - the first in history and an issue in an election campaign that ends in 3½ weeks.

Obama's Republican challenger, Mitt Romney, contends that Obama failed to achieve a pledge to halve the deficit he inherited by the end of his first term.

When Obama took office in January 2009, the Congressional Budget Office forecast that the deficit for that year would total $1.2 trillion. It ended up at a record $1.41 trillion.

The increase was due, in part, to higher government spending to fight the worst recession since the Great Depression. Tax cuts enacted under President George W. Bush and wars in Iraq and Afghanistan contributed to the deficits.

The budget gaps in 2010 and 2011 were slightly lower than the 2009 deficit as a gradually strengthening economy generated more tax revenue. But the deficits still exceeded $1 trillion.

Obama is campaigning for a second term with a pledge to cut deficits by $4 trillion over the next decade. He says he would do so by ending the Bush-era income tax cuts for higher-income Americans and by restraining the growth of spending.

Romney has said he would cut spending growth to help narrow the budget gap. He would cap spending at 20 percent of the economy by 2016. Spending in 2012 accounted for about 23 percent of the economy.

The government borrowed about 31 cents of every dollar it spent in 2012. The string of $1 trillion-plus deficits has driven the national debt above $16 trillion. The magnitude of that figure has intensified debate in Congress over spending and taxes but little movement toward compromise.

Many fear the budget deadlock will send the economy over a "fiscal cliff" next year, when tax increases and deep spending cuts will take effect unless a budget deal is reached.

Obama wants to eliminate the income tax cuts for families that make more than $250,000.

Republicans in Congress and Romney have resisted. They argue that with the economy still weak, the government should not be raising anyone's taxes.

Congress may address the budget crisis during a lame-duck session of Congress after the November elections.

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bob9private

Numbers issued by the government has stated that the cost of the two wars was less than 1.5 trillion and the cost of cast cuts for the so called rich would be less than one trillion over 10 years.
So the question is where tdid the other 10 trillion go. Debt from 5 to 15 trillion,
Unions, car companies, and energy equp from china.
Well spent

October 12 2012 at 9:50 PM Report abuse +1 rate up rate down Reply
gmydogbud

This is all thanks to the Highly Educated, Ivy League Types! Thanks For Nothing!!
The average Joe & Jane, have not caused this. We have been told that we are in a recovery & we all know that thatsa lot of "Who Shot John"! This is the New Normal!!!

October 12 2012 at 7:56 PM Report abuse +3 rate up rate down Reply
mike edwards

do the math 4 more years of this clinton could do this one we are going over a cliff without way out it not funny biden its not funny

October 12 2012 at 7:06 PM Report abuse rate up rate down Reply
Somey

joeproblemchild

Still waiting for barry to utter the words clinton did:

" The era of big givernment is over "
==============================================================================
" The era of big givernment is over " and the era of the law of the jungle is about to start.

October 12 2012 at 5:46 PM Report abuse -2 rate up rate down Reply
jdykbpl45

Thank you, Obama, Biden, Pelosi, Reid, Geithner, and Bernake for all the debt and the reduced future. All are Democrats. Stop spending money we have to borrow.

October 12 2012 at 5:31 PM Report abuse +4 rate up rate down Reply
1 reply to jdykbpl45's comment
Somey

The rich need to start paying their fair share, and 13 % is not a fair share.

October 12 2012 at 5:43 PM Report abuse -4 rate up rate down Reply
Gg

Every person alive bucks up $50,000 and we will be done with this debt today. Now what shall we do?

October 12 2012 at 4:56 PM Report abuse -2 rate up rate down Reply
keywestlucas

where are the Dems ..Now ? Read the article ! They try to make light of OBAMA DRAMA spending ! 1 TRILLION a YEAR !!!! Wow...Get this Reject out of OFFICE before WE GO BROKE !!

October 12 2012 at 4:23 PM Report abuse +5 rate up rate down Reply
1 reply to keywestlucas's comment
xrod52x

You are right , read the article, ( make sure you omit the Bush facts, or that when he took office there was a balanced budget), then make sure you interpet the facts to fit you personal political agenda then make a comment that suits that agenda.
With that done make sure you make a post that reflects that personal agenda and expect that to solve everything
It is very tiresome reading what you posters think is best for your agenda and not what is best for all. You all really need to get over yourselves and start thinking about what is right for all people not just Dems and Reps.now to watch the replies come in an everything but what I said here. Got to love it

October 12 2012 at 4:44 PM Report abuse -2 rate up rate down Reply