October deficit $176 billion

By Jeanne Sahadi, CNNMoney.com senior writer


NEW YORK (CNNMoney.com) -- October was another costly month for Uncle Sam. The Treasury Department reported on Thursday that federal coffers racked up a worse-than-expected deficit of $176.4 billion for the month.

It was the 13th straight month of a reported monthly deficit. Treasury said it was the largest October deficit on record.

October is the first month of the government's fiscal year, and at this reading, the Treasury is estimating that the annual deficit will hit $1.5 trillion. That would top the $1.42 trillion registered for 2009, which was the highest annual deficit since 1945.

Interest paid on the debt in October was $22.8 billion - or 7% of federal outlays for the month.

For the month, the Treasury took in $135.3 billion from various sources and spent $311.7 billion.

The administration has promised to deliver a deficit-reduction plan along with the president's proposed 2011 budget, which will be released early next year.

The call to reduce the deficit as soon as the economy regains its footing has grown louder in recent weeks as the country's accumulated debt will once again pierce the congressionally imposed debt ceiling sometime by the end of the year. As a result, lawmakers will have to vote to increase it from its current level of $12.1 trillion.

In anticipation of that vote, a group of lawmakers have been pushing for a bipartisan commission to be created to make a lot of the hard choices lawmakers have thus far avoided: how to rein in spending on Medicare and Social Security; how high to raise taxes on everyone, not just those making $250,000 or more; and which government funded programs to cut in part or altogether.

The person charged with drafting President Obama's deficit-reduction plan is White House Budget Director Peter Orszag.

Orszag told CNN on Thursday that the current deficit, as bad as it is, "is actually, ironically, helping the economy. The tax relief and additional spending helps to bolster demand when the economy is very weak."

But, he noted, by 2011, 2012 or 2013, too large a deficit will harm the economy by crowding out private investment. "We need to get ahead of that problem," Orszag said. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play

Search for Jobs

Index Last Change % Change
Dow 17,826.30 -279.47 -1.54%
Nasdaq 4,931.82 -75.98 -1.52%
S&P 500 2,081.18 -23.81 -1.13%
Treasuries 1.85 -0.03 -1.49%
Data as of 1:15am ET
Company Price Change % Change
Bank of America Corp... 15.56 -0.23 -1.46%
General Electric Co 27.25 -0.03 -0.11%
Apple Inc 124.75 -1.42 -1.13%
Comcast Corp 58.42 -1.25 -2.09%
Microsoft Corp 41.62 -0.54 -1.29%
Data as of Apr 17
Sponsors

Sections

Lucas will finance 100% of the project at Grady Ranch and wants Marin County teachers and police officers to be able to live there. More

It's the second big layoff at Schlumberger this year. The oil services company cut 9,000 workers in January. More

The Smokio e-cigarette pairs with an app on your phone to keep track of how much you smoke, and how much money you've saved by not buying tobacco cigarettes. More

The home of some of the most iconic toys has teamed up with a crowdsourcing platform for inventors to find the next great toys. More