The federal government kicked off the 2013 budget year with a $120 billion deficit in October, a $22 billion increase from this time last year.
You know what this means, right? It means that we’re well on our way to our fifth straight $1 trillion-plus annual deficit.
Hooray for us.
The deficit, as many Blaze readers know, is the amount of money the government decides to borrow when revenues fall short of expenses. Over the past three years, revenue has fallen below 16 percent of the total economy, as measured by the gross domestic product (GDP), while spending has exceeded 22 percent of GDP. In an attempt to fill this gap, the U.S. government has borrowed, borrowed, and borrowed some more, pushing the federal debt to $16.2 trillion.
The government is expected to hit its borrowing limit of $16.39 trillion by the end of December, by which time Congress will probably just raise the debt-ceiling — again.
Tax revenue increased 13 percent from the same month last year to $184.3 billion. But spending rose 16.4 percent to $304.3 billion. Spending was held down last October by a quirk in the calendar: the first day of the month fell on a Saturday, so some benefits were paid in September 2011.
The government ran a $1.1 trillion annual budget deficit in the fiscal year that ended in September. That was lower than the previous year but, you know, it’s still over $1 trillion dollars!
Obama’s presidency has coincided with four straight $1 trillion-plus deficits — the first in history and a record he distracted from during his re-election campaign with things like Big Bird, binders, and the supposed “war on women.”
And he won.
The size and scope of this year’s deficit will largely depend on what happens with a package of tax increases and spending cuts set to take effect in January unless the White House and Congress reach a budget deal to avoid the so-called “fiscal cliff.”
If the economy goes over the cliff, this year’s deficit would shrink to $641 billion, according to the Congressional Budget Office. But the CBO also warns that the economy would sink into recession in the first half of 2013.
If the White House and Congress can reach a budget deal that extends the tax cuts and avoids the spending cuts, the deficit will end up roughly $1 trillion for the budget year, the CBO says.
But even if lawmakers agree to a deal that extends most of the tax cuts and spending provisions, the deficit for this year will still be about $1 trillion.
The government has run annual deficits for more than a decade and hit a record $1.41 trillion in 2009, Obama’s first year in office. Tax revenue plummeted during the recession downturn, while the government spent at a breakneck pace on its stimulus programs.
President George W. Bush also ran annual deficits through most of his two terms in office after he won approval for broad tax cuts and launched wars in Afghanistan and Iraq.
The last time the government ran an annual surplus was in 2001.
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The Associated Press contributed to this story. All photos courtesy the AP.
(H/T: The Hill)