According to the latest government data release on Tuesday, the US government ran a deficit of $120 billion in October, up sharply from $98.5 billion in the same month last year. The October deficit was also higher than the $113 billion that was estimated.
By Greg Robb
Nov. 13, 2012, 2:18 p.m. EST
WASHINGTON (MarketWatch) — As the White House and Congress inch closer to talks on a deal to tackle the federal budget deficit, the red ink continued to flow in October, according to the latest government data released on Tuesday.
The U.S. government ran a deficit of $120 billion in October, up sharply from $98.5 billion in the same month last year.
The October deficit was also higher than an estimate of $113 billion released last week from the Congressional Budget Office.
Treasury officials said that technical factors including the number of business days contributed to the difference between this month and October 2011.
Including all the adjustments, the department argues that the October deficit would be $130 billion compared to a deficit of $129 billion in October 2011.
Despite the technicalities, the report is a snapshot of what plagues government finances. Spending in the month was $304.3 billion, much higher than the $184.3 billion in receipts collected in the month.
This is the first month of the 2013 fiscal year. The White House has projected a budget deficit of $990.6 billion for the full year. This would be the first annual deficit under $1 trillion in five years.
But any estimate is likely to be revised if Washington can reach an agreement to replace the fiscal cliff, the sharp spending cuts and tax hikes now scheduled to start on Jan 1.
The CBO has said that the economy would go into recession next year if Congress fails to avert the fiscal cliff.
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