CBO: Deficit stands at $1.23 trillion through August

The nonpartisan Congressional Budget Office (CBO) on Thursday estimated that the federal budget deficit through August stands at $1.23 trillion. 

CBO says the government is on track to record a deficit of $1.28 billion when the fiscal year ends Sept. 30, $10 billion less than last year but the third straight year of $1 trillion-plus deficits.

The 11-month total is $28 billion less than the deficit incurred in the same period last year. A large reason for the improvement has been an increase in individual tax collection.

The monthly deficit for August was $132 billion, CBO estimates, $41 billion more than August 2010. CBO said the difference was mostly due to a technical reason: Aug. 1, 2010 was on a weekend, and the government made some big payments that July.

The government spent $3.3 billion in the first 11 months of fiscal 2011, which ends on Oct. 1, $118 billion more than last year despite budget-cutting efforts.

The $40 billion budget cut enacted in the April continuing resolution does not translate into an immediate decrease in outlays.

Most of the increase was again due to accounting: In 2010, the government prepaid $46 billion in premiums to Federal Deposit Insurance Corporation (FDIC) that was counted as income. An additional $55 billion has to do with an adjustment to credit programs such as the Troubled Asset Relief Program.

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