The federal government is on pace to run a deficit of less than $1 trillion for the first time in four years, modest progress in the face of intense debate in Washington about spending.
The Treasury Department said Monday that the deficit was $137 billion in October. That brings the total for the first two months of the budget year to $236 billion - $55 billion less than the same two months last year.
Still, part of the reason for the lower deficit is an accounting quirk.
The Congressional Budget Office estimates the government will run a $973 billion deficit for the 2012 budget year, which began Oct. 1. While that’s lower than last year’s $1.3 trillion imbalance, it would still be higher than any previous deficit before fiscal year 2009.
The government ran an all-time record deficit of $1.41 trillion in 2009, and a $1.29 trillion imbalance in 2010.
The CBO estimate does not include an extension of the Social Security tax cut and emergency unemployment benefits. Congress is likely to extend both before they expire at the end of the year. That could push the deficit to more than $1 trillion if those programs aren’t offset. The two programs are estimated to cost around $200 billion.
A big reason the first two months are lower than last year is an accounting shift. Roughly $31 billion in benefit payments for October went out in late September. Federal benefits are paid on the first day of the month. But because Oct. 1 fell on a Saturday, the payments went out a day earlier and were accounted for in last year’s deficit.
Through the first two months of this budget year, government spending totals $551.2 billion - down 5.8 percent from a year ago, mostly reflecting the benefit shift.
Government revenues total $315.5 billion, up 4.7 percent from a year ago.
Net interest payments on the government debt continued to be one of the fastest rising categories of government spending. They totaled $44 billion in October and November, up 19.5 percent from the same period a year ago.
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