WASHINGTONâ€”The U.S. government ran its 26th straight monthly budget deficit in November amid wrangling over a package that would extend big tax cuts to Americans trying to recover from recession.
The Treasury Department, in its regular budget monthly statement, said the government spent $150.4 billion than it collected in the second month of fiscal 2011.
Economists surveyed by Dow Jones Newswires had expected a shortfall of $126.5 billion. November is traditionally a month for deficits.
The Treasury report, detailing the government’s spending programs, prompted an economic research firm, Macroeconomic Advisers, to lift its forecast for economic growth from October through December by four-tenths of a percentage point, to 2.7%.
Last month’s red ink pushes up the deficit to $290.8 billion for the fiscal year, which began Oct. 1. That figure is a little smaller than the deficit during the same period last year. But President Barack Obama’s administration expects the deficit to top $1 trillion in this fiscal year.
Washington has spent in excess of $1 trillion during each of the last two fiscal years, as revenues were reduced by the deep recession. At the same time, the economic slump and Wall Street bailout raised the government’s expenses.
The November deficit marked the government’s 26th shortfall in a row. As the deficit continues growing, Washington is in the midst of working out key tax legislation. The Senate unveiled final details of a broad tax billâ€”and its 10-year price tag of $858 billionâ€”and began debate Thursday night on the package. Earlier in the week, Mr. Obama struck a deal with Republicans in Congress to extend for two years tax cuts enacted under former President George W. Bush.
The budget statement Friday said federal spending totaled $585.7 billion so far this fiscal year, with revenues at $294.9 billion. In the last two months, the federal government spent $128.3 billion on defense, $36.8 billion in interest payments on its debt, and $20.0 billion for unemployment benefits.
The U.S. budget deficit in fiscal 2010, at $1.294 trillion, was the second-highest ever, behind the record 2009 deficit of $1.416 trillion.
The administration last July said it was projecting a 2011 budget deficit of $1.416 trillion. But Michael Feroli, an analyst at J.P. Morgan Chase, said Friday he expects the budget gap to set a new record in fiscal 2011, reaching $1.5 trillion as the government pays for the extension of tax cuts.
The tax package prompted Mr. Feroli to raise his forecast of 2011 economic growth by half of a percentage point. This also came after the Fed, to spur the weak economy, announced a decision last month to buy $600 billion in U.S. Treasury notes.
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