Government’s budget deficit on track for a record

An $858 billion comprehensive package passed in December providing a two-year extension of the 2001 and 2003 tax cuts for all income levels, as well as an extension of federal unemployment benefits through the end of 2011 is expected to push the fiscal 2011 budget deficit to $1.5 trillion, up from last year’s $1.3 trillion. 

The deal, brokered by the White House and congressional Republicans, is expected to add $400 billion to the deficit this year. 

So far this fiscal year, government revenues were $758.4 billion, an increase of 9.4 percent from a year ago, reflecting gains in individual income tax payments as the economy, which has struggled to create jobs, added nearly 1 million jobs last year.

Since October, spending totaled $1.18 trillion up 4.8 percent from a year ago, reflecting higher spending on the government’s entitlement programs such as Social Security and Medicare.

Receipts from individual income taxes have increased 24 percent to $385 billion since the fiscal year started Oct. 1. 

Revenue and other fees increased to $226.6 billion from $205.2 billion in January 2010. Corporate income tax receipts were up 6.5 percent over last year’s levels. 

The Treasury’s report showed that government spending rose to $276.3 billion in January from $247.9 billion a year ago. 

Spending totaled $1.18 trillion from October through January, 4.8 percent higher than a year ago, reflecting higher spending on the government’s big benefit programs such as Social Security and Medicare as well as higher interest payments on the soaring national debt, which is rapidly approaching the current borrowing limit of $14.3 trillion. 

Another report this week showed that the federal government recorded a $53 billion budget deficit in January, bringing the total to $424 billion for the first four months of 2011, according to the Congressional Budget Office’s monthly report released Monday. 

The CBO estimates that if Congress doesn’t enact any legislation affecting spending or revenues the federal budget deficit will reach $1.5 trillion this year, the same as estimated last month, about $200 billion more than the $1.3 trillion recorded for fiscal 2010.