Tuesday, 08 March 2011

February Sets U.S. Deficit Record

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The Congressional Budget Office predicts a federal budget deficit of $223 billion for February, 2011, the largest monthly budget deficit ever recorded, according to the Washington Times.

The estimate of $223 billion is merely preliminary, CBO reports, with the final number to come next week.

The Times puts the number in perspective by noting that the last two record-breaking monthly deficit figures were also posted in February.

“February is traditionally a bad month for federal finances,” the Times reports. “The previous two records were $220.9 billion, posted exactly a year ago, and $193.9 billion in February 2009.”

More Details

The $223 billion deficit is the difference between $110 billion of receipts and $333 billion in outlays, the CBO reports. Spending in February 2011 was $5 billion more than in 2010, and the deficit is $2 billion more than last February’s deficit of $221 billion. Receipts this February were only $3 billion more than last February.

As far as the budget goes for fiscal 2011, which began in October, the government spent $1.51 trillion versus $868 billion in receipts, for a deficit of $642 billion. That is $10 billion less than last year. During the same time last year, the government spent $1.452 trillion against $801 billion in receipts for a deficit of $652 billion.

No Effect On Democrat Spending Plans

But the news won’t affect Democrat spending plans, the Times reports.

The Senate plans to vote Tuesday on competing proposals to cut spending, but Democrats have rejected GOP-backed cuts of more than $50 billion, and Republicans have ruled out Democrats’ cuts of less than $10 billion, meaning neither plan will draw the 60 votes needed to overcome a filibuster and pass.

“We’ve all done the math and we all know how these votes will turn out: Neither proposal will pass, which means neither will reach the president’s desk as written. We’ll go back to square one and back to the negotiating table,” said Senate Majority Leader Harry Reid, Nevada Democrat.

According to the Times, the Democrats would cut just $6 billion. Sen. Richard Durbin (D-Ill.) said the plan would "push this to the limit." But a CBO analysis of the Democrat spending plan, which has not been released, shows that it would cut just $4.7 billion from spending.

GOP spending plans call for cuts of $57 billion, less than 10 percent of the deficit for February 2011.

Last week, CNSNews.com reported that the federal government debt increased $63.7 billion in February, and that the federal government drained $150 billion from its cash reserve.

According to CNSNews.com’s Terence P. Jeffrey:

At the close of business on Jan. 31, the total federal debt stood at $14.131 trillion ($14,131,051,056,010.84), according to the Treasury Department’s Bureau of the Public Debt. At the close of business on Feb. 28, it stood at $14.195 trillion ($14,194,764,339,462.64), an increase of $63.713 billion ($63,713,283,451.80) in new debt that was accumulated during the shortest month of the year.

To save the government from having to borrow even more money in February, the Treasury significantly diminished the balance in its cash accounts, according to the department’s Daily Treasury Report released today. At the beginning of the month, Treasury’s cash balances equaled $349.1 billion. At the end of the month, they were down to $190.6 billion — a drop of $158.5 billion.

Two weeks ago, Jeffrey disclosed that the Obama administration has increased the debt per American household by $30,000 in its first two years.