Deficit Tops $1 Trillion for Second Year in a Row
Tom Diemer
Correspondent
Posted:
07/9/10
Gasp! The federal budget deficit has exceeded $1 trillion for the second consecutive year. But there's good news: The $1.005 trillion mark recorded at the end of June is $81 billion less than the deficit at that point in 2009, according to the Congressional Budget Office, the non-partisan group that keeps track of such things.
Tax revenue, fueled by corporate tax payments, is up a little while government spending has decreased some 3 percent, the budget office said. "Receipts from corporate income taxes for the first nine months were $31 billion (or 31 percent) higher than the amounts collected during the same period last year," the CBO said. "That increase reflects higher taxable profits in 2010, resulting from improved economic conditions and from lower depreciation charges."
Another accounting comes due on Sept. 30, the end of the 2010 fiscal year. But if the trend holds -- receipts for the first three quarters were $8 billion above the same period in 2009 -- the yearly deficit should wind up slightly below last year's $1.4 trillion mark. "The increase in corporate payments in June could indicate that the September quarterly payments will also show strength because corporate receipts in those two months tend to move in tandem," CBO said.
"There is marginally good news, but one has to keep it in perspective," said Robert Bixby, executive director of the Concord Coalition, a non-partisan group that advocates for responsible budgeting. "There is some revenue growth, which is significant because that is an indication the economy is recovering and that will help bring the deficit down. That's a pretty slim reed to grasp. It is better than nothing."
The last time the federal budget was balanced -- with income to the government meeting or exceeding outlays approved by Congress -- was 2001. That budget, for the fiscal year ending Sept. 30, 2001, was written under President Clinton before President George W. Bush took office in January 2001.
Tax revenue, fueled by corporate tax payments, is up a little while government spending has decreased some 3 percent, the budget office said. "Receipts from corporate income taxes for the first nine months were $31 billion (or 31 percent) higher than the amounts collected during the same period last year," the CBO said. "That increase reflects higher taxable profits in 2010, resulting from improved economic conditions and from lower depreciation charges."
Another accounting comes due on Sept. 30, the end of the 2010 fiscal year. But if the trend holds -- receipts for the first three quarters were $8 billion above the same period in 2009 -- the yearly deficit should wind up slightly below last year's $1.4 trillion mark. "The increase in corporate payments in June could indicate that the September quarterly payments will also show strength because corporate receipts in those two months tend to move in tandem," CBO said.
"There is marginally good news, but one has to keep it in perspective," said Robert Bixby, executive director of the Concord Coalition, a non-partisan group that advocates for responsible budgeting. "There is some revenue growth, which is significant because that is an indication the economy is recovering and that will help bring the deficit down. That's a pretty slim reed to grasp. It is better than nothing."
The last time the federal budget was balanced -- with income to the government meeting or exceeding outlays approved by Congress -- was 2001. That budget, for the fiscal year ending Sept. 30, 2001, was written under President Clinton before President George W. Bush took office in January 2001.