U.S. deficit tops $1 trillion for 4th straight year
WASHINGTON — The United States has now spent $1 trillion more than it's taken in for four straight years.
The Treasury Department confirmed on Friday what was widely expected: The deficit for the just-ended 2012 budget year — the gap between the government's tax revenue and its spending — totaled $1.1 trillion. Put simply, that's how much the government had to borrow.
The 2012 budget gap was $1.089 trillion, narrower than last year's deficit of $1.297 trillion because of higher corporate income tax receipts and less spending, the Treasury Department said.
The deficit equaled 7.0 percent of economic output, down from 8.7 percent last year, the department said. Economists generally consider deficits exceeding 3.0 percent of gross domestic product to be unsustainable in the long term.
It wasn't quite as ugly as last year. The government reported a budget surplus for the final month of the 2012 fiscal year.
Tax revenue rose 6.4 percent from 2011 to $2.45 trillion. And spending fell 1.7 percent to $3.5 trillion. As a result, the deficit shrank 16 percent, or $207 billion.
A stronger economy meant more people had jobs and income that generated tax revenue. Corporations also contributed more to federal revenue than in 2011.
The government spent less on Medicaid and on defense as military involvement in Iraq was winding down.
Barack Obama's presidency has coincided with four straight $1 trillion-plus annual budget deficits — the first in history and an issue in an election campaign that ends in 3½ weeks.
When Obama took office in January 2009, the Congressional Budget Office forecast that the deficit that year would total $1.2 trillion. It ended up at a record $1.41 trillion.
The increase was due in large part to the worst recession since the Great Depression. Tax revenue plummeted, and the government spent more on stimulus programs.
Tax cuts enacted under President George W. Bush and military spending in Iraq and Afghanistan contributed to the deficits.
“There is nothing like the number trillion to focus the mind,” says Maya MacGuineas, president of the Committee for a Responsible Federal Budget, which advocates budget discipline. “The fiscal situation is terrible. Changes will have to be made as quickly and carefully as possible.”
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Pilot in Atlantic Ocean crash lost consciousness, Coast Guard says
- Border Patrol agent opens fire on armed militia member in Texas
- New heart drug seen as significant breakthrough
- Texas appeals judge’s ruling on restrictive abortion law
- Squashing stereotypes has women learning carpentry
- Manatee status as ‘endangered’ draws complaints; classification under review
- Revival of beer gardens in Milwaukee prompts other cities to consider it to shore up budgets
- California governor appeals ruling that struck down schoolteacher tenure
- Hot-sauce company offers tours to irritated neighbors
- Half-ton alligator sets world record
- Use of body cameras by police gain favor across nation