US deficit up 15.7% in first half of fiscal 2011

04-13-2011 • google.com/hostednews/afp

The US budget deficit shot up 15.7 percent in the first six months of fiscal 2011, the Treasury Department said Wednesday as political knives were being sharpened for a new budget battle. The Treasury reported a deficit of $829 billion for the October-March period, compared with $717 billion a year earlier, as revenue rose a sluggish 6.9 percent as the economic recovery slowly gained pace. The Treasury argued that the pace of increase in the deficit was deceptive because of large one-off reductions in expenditures made during the first half of fiscal 2010, compared with previous and subsequent periods. Those included a $115 billion reduction in funds spent on the Troubled Asset Relief Program (TARP) -- the financial institution bailout program -- in March 2010. But 2011 so far has also seen significant increases in spending on defense, Social Security, health and debt service, while receipts have not grown as fast.