Budget deficit sets record in February

By MARTIN CRUTSINGER


WASHINGTON — The government ran up the largest monthly deficit in history in February, keeping the flood of red ink on track to top last year's record for the full year.

The Treasury Department said Wednesday that the February deficit totaled $220.9 billion, 14 percent higher than the previous record set in February of last year.

The deficit through the first five months of this budget year totals $651.6 billion, 10.5 percent higher than a year ago.

The Obama administration is projecting that the deficit for the 2010 budget year will hit an all-time high of $1.56 trillion, surpassing last year's $1.4 trillion total. The administration is forecasting that the deficit will remain above $1 trillion in 2011, giving the country thrree straight years of $1 trillion-plus deficits.

The administration says the huge deficits are necessary to get the country out of the deepest recession since the 1930s. But Republicans have attacked the stimulus spending as wasteful and a failure at the primary objective of lowering unemployment.

The administration defends the economic stimulus bill that Congress passed in February 2009 with a pricetag at the time of $787 billion as the right medicine to get the economy back on its feet. President Barack Obama has said even more is needed to battle an unemployment rate that remained stuck in February at 9.7 percent.

The White House says that job creation will remain a top priority, hoping to convince voters that Obama did not spend too much time during his first year in office trying to get Congress to pass health care reform.

The government's monthly budget report showed the record $220.9 billion deficit for February reflected outlays of $328.4 billion and revenues of $107.5 billion. The February receipts marked the first time that revenues are up compared with the same month a year ago since April 2008. Revenues had fallen for 21 straight months as the recession cut into both individual and corporate income tax payments.

Deficits normally shoot up in February because it is a month when the government makes large refund payments to individuals and corporations as part of the tax filing process. Those payments were boosted this year by various tax credits that were expanded or added as part of the government's stimulus efforts including the "Making Work Pay" tax credit and the first-time home buyers tax credit.

Through the first five months of the budget year, government revenues totaled $800.5 billion, down 7 percent from a year ago, while outlays totaled $1.45 trillion, up a slight 0.1 percent from a year ago.

The deficit of $651.6 billion through February is up by 10.5 percent from the $589.8 billion deficit run up during the first five months of the 2009 budget year. The government's budget year begins on Oct. 1.

The budget that Obama sent to Congress in February projects that the deficits over the next decade will total $8.53 trillion. But the Congressional Budget Office last week put the 10-year total even higher at $9.8 trillion. Part of the reason for the $1.2 trillion difference is that the CBO is projecting slower economic growth and thus less tax revenues than the administration over the next decade.

The administration has maintained that the country must run large budget deficits until the economy has begun to grow at a sustainable pace that is bringing the unemployment rate down. Only then, the administration says, should the government focus on getting control of the deficits.

Obama has created by executive order an 18-member fiscal reform commission that has been charged with coming up with a plan to shrink the deficit to 3 percent of the economy within five years. The plan is scheduled to be unveiled in December, after the midterm congressional elections.

With the economy so weak, the interest rates that the government has to finance the flood of red ink have remained low. However, economists are worried that the favorable outlook on interest rates could change quickly if investors, including foreign investors, start to worry about the government's commitment to restraining future deficits. China is the largest foreign holder of U.S. Treasury securities.

Through the first five months of this budget year, net interest payments totaled $86.5 billion, up 15.3 percent from a year ago.

In its report last week, the CBO predicted that the government debt held by investors would climb from $7.5 trillion at the end of last year to $20.3 trillion in 2020. CBO forecast that interest payments would more than quadruple from a projected $209 billion this year to $916 billion annually by the end of the decade.

Copyright © 2010 The Associated Press. All rights reserved

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Seems as though none of the left wing liberal obama supports can come up to a rebuttal to this article.........wonder why...

At some point, even they have to realize that the blame Bush dogma isn't going to persuade people any longer..

Economics isn't religion!!!

Republican flunkies have jacked National debt and deficits, contrary to republican 'dogma'. Also, the Democrat administrations have faired in the exact opposite direction of the imposed GOP 'dogma'.

'W' reign has been no exception. As a matter of fact, he has established new records in the field of blowing the roof on both deficit, and National debt.

Since taking office, Obama has succeeded to stabilize the inherited mess. Contrary to GOP 'dogma', economic indicators don't lie.

But GOP fans are not concerned with facts and numbers. Religious dogma, fear, generalities, and calumnies are so much 'simpler'.

Demonizing a President whom is turning things around from what everyone agreed was the biggest mess since the great depression, can only be described as dogmatic.

... and dogma always looses against facts and numbers!!!

The GOP seems to be more interested in preaching than governing. Spreading fear, sky rocket deficits and debts, confused generalities, unfounded attacks, but never any sign of accountability!!!

So let the GOP PREACH, and the democrats GOVERN!!!

Lower deficits and debt have only gotten corrected by democrat administrations in the past half century.

You're concerned about historically high debt?!?!?! Switch party allegiance!!!

P.S.: The 'he's a muslim' approach hasn't worked. The 'not born here' hasn't worked. The 'socialist' mud sling hasn't worked.
So now the dogmatic fear tactic (GOP fans believe 'believe' in fear tactics: you know the good old 'god fearing' BS) IS NONE OTHER THAN THE OLD AND RELIABLE 'HITLER's GHOST!!!

What's the relation with President Obama!?!?!? None!!! But facts, pertinence and reality are but a profound annoyance to the 'Dogmatic' GOP preaching ones.

I can't understand why hitler is being dug up sooo much now days , I mean he's been dead longer than 90% of the people here . And I haven't even read a word of turth said either . I mean you have even made a very degradeing movie about him . obama's not german he's not a war monger , he hasn't advocated killing anyone . hitler made the german economie cook for the average german , obama is n't doing that .
There is one other thing thats true gw dum uck started the crash with his private war obama didn't .
WHAT WE NEED IS A NEW PARTY WITH NEW FACES AN NEW RULES AND THE REPUBLICANS CAN'T OFFER THAT AND THE DEMOS DON'T KNOW HOW . THEY HAVE SEEN THE PROBLEM AND IT IS THEM .

Force em...by limiting spending.

http://www.cnsnews.com/news/article/62268

The Alcholic Congress....now that's a proper tribute!

Members of Congress say they are concerned about the exploding budget deficit, though not so concerned, it seems, to stop all the spending that’s actually causing the deficit explosion—up to about 24.7 percent of gross domestic product (GDP).

President Obama’s solution has been to appoint, by executive order—because the Senate wouldn’t pass it—a bipartisan group to explore what the government can do to reign in the spending.

It’s like an alcoholic convening a meeting of other heavy drinkers to discuss how the alcoholic can cut back on his drinking—and having the meeting at a bar at happy hour.

Of course, everyone knows the committee will recommend some minor spending cuts and some major tax increases. The tax increases would pass and the spending cuts would be postponed until later—because spendaholics don’t really want to cut spending, they just want to say that they do.

Now Reps. Mike Pence (R-IN) and Jeb Hensarling (R-TX) have stepped up to the plate with a better way. Call it an intervention.

They propose a constitutional amendment to cap government spending at 20 percent of GDP, which has been the historical average since World War II. The cap could be ignored during war, and a two-thirds vote of Congress could override it.

Why they chose a constitutional amendment as opposed to legislation isn’t clear, but probably because it is more permanent. Democrats pushed pay-as-you-go (or paygo) legislation only a month ago, requiring Congress to find offsets to pay for any new spending measures. And then promptly ignored their new paygo rule by spending $10 billion three weeks later without a “pay for” to offset the cost.

So even though a constitutional amendment would be very hard to pass, maybe it’s the only way to get Congress to live by the rules it imposes on itself.

Pence-Hensarling is about controlling government spending. It’s simple and effective, which is why Congress and this administration will likely do whatever they can to dodge it.

As they order another round for everyone—on the House.


Posted in Economic Growth Government Politics Tax || 0 Comments »
Author: Merrill Matthews Jr. || Location: Lewisville, Texas, USA

I will be glad when the Bush tax cuts to the rich expire and we can take in more revenue from those who can afford it.

I don't know if you noticed but his job approval rating isn't all that great. You are about to get your ***** handed to you in November by a party that pretty much sucks. Maybe after the beatdown you'll realize that blaming someone else for your failures is the recipe for DE.. FEAT..

And yes... The first year of Obamanation has been an utter failure.

We can get it higher than that...we're not even trying.

yes this first year's been an utter failure...mainly because Obama hasn't done anything the GOP geniuses said he was going to do....ie cut and run , employ Ayres or Wright, destroy america, admit he's really a secret muslim..ect.