Federal Budget Deficit Passes $1 Trillion For Fourth Straight Year
The Federal Budget deficit topped $1 trillion for the fourth consecutive year during the just concluded Fiscal Year 2012:
The federal government logged a $1.1 trillion deficit in fiscal year 2012 — marking the fourth straight year of trillion-dollar shortfalls.
As a share of the economy, the deficit fell to roughly 7%, according to Congressional Budget Office estimates released Friday. That’s down from 8.7% in 2011, and well below the bruising 10.1% recorded in 2009 during the depth of the economic downturn.
Deficits as a share of GDP in the past four years have been the highest since 1947.
The decline is thanks largely to an uptick in revenue. Compared to last year, the federal government collected 6% more in fiscal 2012, which ended Sept. 30
A big reason was the jump in corporate tax receipts, which rose a whopping 34%. CBO attributes the increase in large part to a change in tax rules, particularly those that govern how fast companies can write off equipment costs.
Individual income tax and payroll tax receipts were also higher, by 3% and 4%, respectively.
Spending, meanwhile, fell 2%. That decline, however, is due mostly to shifts in the timing of payments, CBO said.
Outlays for Medicaid, unemployment benefits, defense and education programs all fell. Meanwhile, Social Security outlays rose 6% — more than in recent years. Money spent on Medicare increased more slowly than in the preview two years, rising 3%.
By all accounts, we’re likely to see another trillion dollar deficit during Fiscal Year 2013, or at least get very close to it. At some point, we’re going to pay a price for this.