The Treasury Department published its budget data for the first month of the United States federal government’s fiscal year. Washington spent $304 billion in the month of October and its budget deficit rose 22 percent, or $98.5 billion, from a year ago to $120 billion.
October is usually the month that the federal government runs a budget deficit, but it should be noted that the $120 billion figure is higher than the projected $113 billion, which could cast doubt at the White House’s target to bring the deficit below $1 trillion for the first time since 2008, or 6.1 percent of the GDP.
Last month, federal spending increased 16 percent and revenues jumped 13 percent to $184.3 billion. In the end, this is the fourth largest October deficit in U.S. history, third largest October monthly outlays and just short of the $320.4 billion all-time high posted in Oct. 2008.
According to charts from ZeroHedge.com, the biggest October deficit was in 2009 when it was $176.4 billion.
The latest budget news was revealed as White House officials and congressional lawmakers attempted to stave off the inevitable “fiscal cliff” that will lead to tax increases and spending cuts as of Jan. 1, 2013, which could be averted if a deal is met.
Economic Collapse News reported last week that Speaker of the House John Boehner said the Republican leadership will not accept tax hikes, but would agree to a change in the tax code. Senate Majority leader Harry Reid wants an increase in tax rates, especially for those earning $250,000 or more.
October’s budget deficit also comes as the Department of Agriculture released its data on its Supplemental Nutrition Assistance Program (SNAP). It showed that there were an extra 420,863 recipients of food stamps in the month of August. In total, there are 47.1 million individuals receiving food stamps and has steadily gone from 33.4 million in 2009.
Wall Street Journal reports that the Obama administration is seeking $1.6 trillion in additional tax revenue over the course of the next 10 years, which is actually double from the discussed $800 billion with GOP leaders in summer 2011.
“The president has put forward a very specific plan that will be what he brings to the table when he sits down with congressional leaders,” said White House Press Secretary Jay Carney on Wednesday, reports Fox News.
President Obama met with union leaders and liberal activists and vowed to stand strong in implementing tax increases to the nation’s affluent.
However, Republican Kentucky Senator Mitch McConnell has said the GOP is ready to make an agreement, but is not prepared to raise taxes on any American in such a fragile economy.
“When it comes to the great economic challenges of the moment, saying that you want a balanced approach is not a plan,” said the Senate Minority leader. “The tedious repetition of poll-tested talking points is simply that and the longer the president uses them as a substitute for leadership, the more difficult it will be to solve our many problems.”
Retiring Texas Republican Congressman Ron Paul told Bloomberg Television on Tuesday that there is a “zero percent” chance a grand bargain will be made and any agreement will only be “temporary.”
“They can postpone big decisions in January and yet that still does not remove the uncertainty,” said the three-time presidential candidate. “Uncertainty is a major cause of the inability for the market to get moving again and they have to revamp it in a much more detailed fashion than they are even talking about right now.”
ECN reported last week that Dr. Paul believes that the U.S. has already fallen off of the fiscal cliff.
Although the Congressional Budget Office (CBO) has the budget projected to sink below the $1 trillion mark to as low as $600 billion, it will still go back up to $1 trillion past 2019. This would still add to the growing $16.3 trillion national debt, which is expected to soar to $20.3 trillion by the end of President Obama’s second term.
LearnLiberty.org posted an in-depth video on the federal government’s budget. Due to the rate of spending, the government runs out of money by Jul. 31, which means it still has five months to find other sources of revenue to keep the doors of Washington open.
Be sure to watch the video below to get a sense of what the government has to cut just to keep the lights on in the House and Senate.
The national debt now stands at $16,258,755,103,850 (at the time of this writing).