Federal Budget Deficit: Highest on Record

The federal budget deficit rose to $150.4 billion last month, the largest November gap on record. And the government's deficits are set to climb higher if Congress passes a tax-cut plan that's estimated to cost $855 billion over two years.

The Treasury Department says November's budget gap was 25 percent more than the deficit in November 2009.

For the first two months of the current budget year, which began Oct. 1, the deficit totals $290.8 billion. That's 2 percent less than for the same period a year ago. And economists had been estimating that the full-year deficit would decline after two years of record highs.

But analysts say the tax deal President Barack Obama reached with Republicans this week will give the 2011 budget year the largest deficit in history $1.5 trillion, according to economists at JPMorgan Chase. It would mark the third straight year of trillion-dollar-plus deficits.

Under the tax-cut plan, JPMorgan economist Michael Feroli said he expects a $1.5 trillion deficit this year to be followed by a $1.2 trillion gap in 2012.

Many economists had expected Congress to extend the tax cuts that were enacted in 2001 and 2003. And they had included those extensions in their deficit forecasts for coming years. But they hadn't factored in other parts of the tax-cut plan, notably a 2 percentage-point cut in workers' Social Security tax for next year. That will cost the government an additional $112 billion over the next year.

Before the tax-cut agreement, many economists forecast that the deficits would decline gradually in coming years. The Wall Street firms that serve as primary dealers for the government's debt auctions estimated last month that the 2011 deficit would dip to $1.21 trillion and to $1.02 trillion in 2012.

The deficit for the 2009 budget year is the all-time high: $1.42 trillion. The second-highest is the $1.29 trillion deficit for the 2010 budget year, which ended Sept. 30.

Though it will further swell budget deficits, economists expect the tax-cut package to boost economic growth. Nariman Behravesh, chief economist at IHS Global Insight, said Friday he thinks the tax cuts would boost overall growth, as measured by the gross domestic product, to 3 percent in 2011. That's up from IHS' forecast before the tax deal of 2.4 percent growth.

[tsigili]

Precisely why squandering 900 billion more, in the tax cut "deal" is totally unacceptable.

[bamio]

Obamie lied AGAIN!!!! bigger deficit, no jobs created, no gitmo closing, no public option. this guy is a friggin joke!!!

[YrWrongAgain]

Anyone who has seen Minister Louis Farrakhan speak about numerology has seen the kind of thinking that is now at work on the deficit.

[stn_sage]

Neither the president, nor Congress work for the public, that is why they take NO action, or, action that makes matters worse! Consequently, don't expect the deficit to decrease any time in the near future, because it won't! Until the economy is allowed to self-correct, and the public boots the rest of the 'dead weight' in Congress out of office, things will not measurably improve!

[wyodutch]

The wars of occupation in Iraq and Afghanistan are bleeding us to the tune of $4,000,000,000 a week.
.
The parasites of the world are sucking our blood. Israel... Egypt... Yemen... Poland... Romania... Kenya. The list goes on and on and on.

[YrWrongAgain]

The untermenchen, did you say?

[oldbasicgal]

ITS THE STUPID SPENDING BY OUR STUPID FEDERAL GOVERNMENT AND THE STUPID PEOPLE THEY HIRE, STUPID.

[oldbasicgal]

ITS THE STUPID SPENDING, STUPID!

[oldbasicgal]

Examples of Government Waste
Published on September 14, 2005 by Brian Riedl

The federal government cannot account for $24.5 billion spent in 2003.

A White House review of just a sample of the federal budget identified $90 billion spent on programs deemed that were either ineffective, marginally adequate, or operating under a flawed purpose or design.

The Congressional Budget Office published a "Budget Options" book identifying $140 billion in potential spending cuts.

The federal government spends $23 billion annually on special interest pork projects such as grants to the Rock and Roll Hall of Fame, or funds to combat teenage "goth" culture in Blue Springs, Missouri.

Washington spends tens of billions of dollars on failed and outdated programs such as the Rural Utilities Service, U.S. Geological Survey and Economic Development Association.

The federal government made $20 billion in overpayments in 2001.

The Department of Housing and Urban Development's $3.3 billion in overpayments in 2001 accounted for over 10 percent of the department's total budget.

Over one recent 18-month period, Air Force and Navy personnel used government-funded credit cards to charge at least $102,400 for admission to entertainment events, $48,250 for gambling, $69,300 for cruises, and $73,950 for exotic dance clubs and prostitutes.

Examples of wasteful duplication include: 342 economic development programs; 130 programs serving the disabled; 130 programs serving at-risk youth; 90 early childhood development programs; 75 programs funding international education, cultural, and training exchange activities; and 72 federal programs dedicated to assuring safe water.

The Advanced Technology Program spends $150 million annually subsidizing private businesses, and 40% of this goes to Fortune 500 companies.

The Defense Department wasted $100 million on unused flight tickets, and never bothered to collect refunds even though the tickets were reimbursable.

The Conservation Reserve program pays farmers $2 billion annually to not farm their land.

Washington spends $60 billion annually on corporate welfare, versus $43 billion on homeland security.

The Department of Agriculture spends $12 billion to $30 billion annually on farm subsidies, the vast majority of which go to agribusinesses and farmers averaging $135,000 in annual income.

Massive farm subsidies also go to several members of Congress, and celebrity "hobby farmers" such as David Rockefeller, Ted Turner, Scottie Pippen, and former Enron CEO Ken Lay.

The Medicare program pays as much as eight times the cost that other federal agencies pay for the same drugs and medical supplies.

Congressional investigators were able to receive $55,000 in federal student loan funding for a fictional college they created to test the Department of Education.

The Army Corps of Engineers has been accused of illegally manipulating data to justify expensive but unnecessary public works projects.

Food stamp overpayments cost $600 million annually.

School lunch program abuse costs $120 million annually.

Veterans' program overpayments cost $800 million annually.

Earned Income Tax Credit (EITC) overpayments cost $9 billion annually.

Better tracking of student loan recipients would save $1 billion annually.

Preventing states from using accounting tricks to secure additional Medicaid funds would save several billion dollars annually.

Medicare contractors owe the federal government $7 billion.
Sources: see Brian M. Riedl, "How to Get Federal Spending Under Control," Heritage Foundation Backgrounder No. 1733, March 10, 2004, at http://www.heritage.org/Research/Budget/bg1733.cfm.



Brian Riedl is Grover M. Hermann Fellow in Federal Budgetary Affairs in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

[wyodutch]

The sooner the Empire collapses under the massive load of debt, the sooner we can push the big reset button and restore the Republic.
.

[oldbasicgal]

At any given time in the United States, a total of 2.5 MILLION persons are incarcerated in our states' jails. On the average, it costs more than $20,000.00 a year for each prisoner's upkeep.

Twenty K per year is more than the income of those 43% of Americans who make beneath the IRS tax guidelines.

We have prisoners living under better conditions and costing more per year than many average citizens.

Why?