According to a U.S. Treasury report released Tuesday, the U.S. government fell $2 trillion deeper into debt during fiscal 2010 as government debt and promised federal benefits increased, bringing the nation's 2010 deficit to more than $13.5 trillion compared to $11 trillion in 2009. Reuters reports:
The Financial Report of the United States, which applies corporate-style accrual accounting methods to Washington, showed the government's liabilities exceeded assets by $13.473 trillion. That compared with a $11.456 trillion gap a year earlier.
Unlike the normal measurement of government intake of receipts against cash outlays, accrual accounting measures costs such as interest on the debt and federal benefits payable when they are incurred, not when funds are actually disbursed.
The report was instituted under former Treasury Secretary Paul O'Neill, the first Treasury secretary in the George W. Bush administration, to illustrate the mounting liabilities of government entitlement programs like Medicare, Medicaid and Social Security.
The government's net operating cost, or deficit, in the report grew to $2.080 trillion for the year ended September 30 from $1.253 trillion the prior year as spending and liabilities increased for social programs. Actual and anticipated revenues were roughly unchanged.
The cash budget deficit narrowed in fiscal 2010 to $1.294 trillion from $1.417 trillion in 2009. But the $858 billion tax cut extension package enacted last week is expected to keep the deficit well above the $1 trillion mark for another year.
This latest Treasury report should put pressure on the incoming Republican majority in the House of Representatives in January.
Treasury Secretary Tim Geithner responded to the new report by saying that the U.S. faces "significant and persistent challenges" as the budgetary shortfalls from programs like unemployment insurance, Social Security, Medicare and Medicaid continue to rise.
“We must balance our efforts to accelerate economic recovery and job growth in the near term with continued efforts to address the challenges posed by the long-term deficit outlook,” Geithner said in today’s report.