The U.S. government ran up a $1.3 trillion budget deficit in the fiscal year ending September 30, its third consecutive annual budget deficit to exceed $1 trillion. The annual budget deficit in 2010 was $1.29 trillion and the second highest on record, according to the Treasury Department, a place that 2011 will now hold. In 2009, the deficit reached $1.42, its highest ever.
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“This report confirms that we cannot waste any time in jump-starting economic growth and job creation to lay the foundation for a stronger economy and lower future deficits,” said Jacob Lew, director of the White House Office of Management and Budget, in a statement.
The budget deficit in fiscal 2011 was 8.7% of the nation’s gross domestic product, down from 9% in 2010. The gap climbed as high as 10% of GDP in 2009, it’s highest since 1945, according to the Congressional Budget Office.
As the result of a debt-ceiling deal reached in August, a special 12-member congressional committee was formed and charged with the task of finding $1.5 trillion in savings over the next decade. If Congress fails to act on the group’s recommendations by December 23 of this year, the compromise will trigger automatic cuts of $1.2 trillion, which would begin in fiscal 2013.
The panel has been in closed-door meetings for the past month, and is assigned to propose a plan by November 23, the day before Thanksgiving.
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Today is the deadline for congressional committee leaders to submit their recommendations for cuts. House Democrats made their recommendations yesterday, focusing more on job creation than debt reduction, but House Republicans haven’t offered formal proposals on how to cut spending.
Spending rose 4.2% in fiscal 2011 from the year earlier to $3.6 trillion, while revenue climbed 6.5% to $2.3 trillion.