The government ran a $1.3 trillion deficit for the budget year that ended last month, the third straight year it has operated more than $1 trillion in the red.
The 2011 budget deficit was the second highest on record. It is slightly ahead of the previous budget year's $1.29 trillion deficit but below the $1.41 trillion imbalance record in 2009 (which included the dramatic collapse of financial markets and a huge bailout effort by the government. The nation's deficit that year was $1.412 trillion), reports The Hill
A decade ago, the idea of the government running surpluses and trillion-dollar deficits seemed almost unimaginable. However, those deficits now loom over tense negotiations in Washington.
Lawmakers are under pressure to agree by Thanksgiving on where they can cut $1.2 trillion over the next decade. If they cannot, automatic cuts to Medicare, defense spending and other areas of the budget would go into effect in Jan. 2013.
For its part, the White House has called on Congress to pass Obama's budget proposals made last month (that he has been plugging nonstop), which they say would cut $4 trillion from the debt over 10 years, reports Newser
Geithner, according to The Hill, has also urged Congress to enact Obama’s deficit-reduction recommendations from September, which he said would shave $4 trillion off the deficit over 10 years.
"It follows a balanced approach: asking everyone to do their part, so no one has to bear all of the burden," said White House Budget Director Jack Lew. "And it says that everyone—including millionaires and billionaires—should pay their fair share."
Again with the "fair share" bit.
For 2011, the government had to borrow 36 cents of every dollar it spent. The string of massive debts has made interest on that debt the fastest growing budget category. For 2011, net interest payments rose 15.7 percent to $227 billion.
Republicans have criticized President Obama for deficits that have skyrocketed since he took office. Much of the shortfall is from smaller tax returns, a result of high unemployment and falling incomes during the recession and a slow recovery, reports The Hill.
Total revenues increased 6.5 percent to $2.3 trillion for the budget year that ended Sept. 30; spending rose 4.2 percent to $3.6 trillion.
The nation's debt is now $14.8 trillion. The enormity of that figure has stoked intense partisan debate in Congress over spending and taxes.
Congress reached a last-minute deal in August to raise the government's borrowing limit in stages. However, as part of the deal, lawmakers tasked a 12-member deficit-cutting panel with finding at least $1.2 trillion in savings over the next decade.
Administration officials said Friday that Congress needs to reach an agreement through the supercommittee process but also should approve President Barack Obama's $447 billion jobs plan. However, the measure fell short of gaining the 60 votes required to be called up for debate in the Senate. All 46 Republicans in the chamber opposed the measure, which seeks to pay for the plan by boosting taxes on the wealthy and corporations
As members of the supercommittee deliberate, party leaders have jousted in public over their conflicting priorities. For Republicans, that means no tax increases. For Democrats, it means no curbs on entitlement programs, such as Medicare, without tax increases.
The August budget deal is projected to trim future deficits by $2.1 trillion. That includes the cuts made by the supercommittee and another $900 billion in savings from caps on discretionary spending.
The cuts are expected to begin in the 2012 budget year. CBO estimates $21 billion in cuts to this year's deficit, which is estimated to be $973 billion. The Obama administration is estimating that the 2012 deficit will total $956 billion.
The Associated Press contributed to this story.