US federal deficit hits $1.1tr so far this fiscal year

Updated: 2011-08-11 06:45


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WASHINGTON - The federal deficit of the United States recorded $1.1 trillion in the first ten months of fiscal year 2010-2011, indicating it the third consecutive year that the US fiscal imbalance topped $1-trillion mark, reported the Treasury Department on Wednesday.

The Treasury data showed that the US federal budget deficit in July reached $129 billion, much higher than $43 billion in the previous month.

In the first ten months of fiscal year 2011, which began in October 2010, US federal government received $1.89 trillion, but it spent $2.99 trillion in the same period.

It is expected that this year's deficit is on pace to exceed last year's imbalance of $1.29 trillion but fall short of the record $1.41 trillion set in 2009.  

Before 2009, the US federal deficit had never come close to $1 trillion in a single year.

Soaring deficit has triggered increasing concern in the world.

Rating agency Standard & Poor's last Friday downgraded the US government's credit rating from AAA to AA+ for the first time in history, citing the world's largest economy's worsening fiscal prospect and less effective policy making mechanism.

In order to avert an unprecedented default crisis, the White House and the Republicans hammered a deal at the end of last month to increase the country's legal borrowing limit and reduce the public debt in the next ten years.

But the deal fell short of the $4 trillion in cuts that Standard & Poor's said was needed to achieve a credible deficit plan.

According to the 2011 US Deficit Reduction Act, which was signed into law by US President Barack Obama on August 2, the federal government is expected to cut more than $2 trillion spending in 10 years.

Currently, US federal public debt totals about $14.4 trillion. Data from the International Monetary Fund showed that the US debt to gross domestic product (GDP) ratio is over 99 percent, which is among the highest level in advanced countries.

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