Yep: Federal deficit officially tops $1 trillion for the fourth time

Just in case there was any doubt in anyone’s mind — the Congressional Budget Office has released their monthly report, and with the government’s fiscal year set to end on September 30th, they’ve officially announced that we’ll come in with an above-trillion dollar deficit for the fourth year running. Looks like $1.17 trillion will be the final tally, reports the WashTimes:

The $192 billion deficit was the worst August on record, though the total deficit so far this year is actually lower than it was in 2011, when it stood at $1.23 trillion after 11 months.

CBO said rising wages have brought more tax revenue into the government this year, while new spending has risen at a slightly lower pace, which explains the declining deficit. Spending on Medicaid and unemployment benefits both dropped as heightened stimulus spending ended, and lower costs for the wars in Afghanistan and Iraq also have meant less spending on defense.

But Social Security is up 6 percent and Medicare spending is up 4 percent compared with 2011, CBO said. …

But CBO in a report last month predicted the government will flirt with yet another trillion-dollar shortfall next year.

Oy vey. If we don’t initiate a plan to reduce our debt-to-GDP ratio on the double, it looks like we’re on the path toward another credit downgrade. Standard & Poor’s downgraded the United States’ credit rating from AAA for the first time ever last year following the dysfunctional debt-ceiling debate, and now Moody’s Investor Services is warning that unless we come up with a credible plan to get back on the fiscal wagon soon, they’ll do the same:

Budget negotiations during the 2013 Congressional legislative session will likely determine the direction of the US government’s Aaa rating and negative outlook, says Moody’s Investors Service in the report “Update of the Outlook for the US Government Debt Rating.”

If those negotiations lead to specific policies that produce a stabilization and then downward trend in the ratio of federal debt to GDP over the medium term, the rating will likely be affirmed and the outlook returned to stable, says Moody’s.

If those negotiations fail to produce such policies, however, Moody’s would expect to lower the rating, probably to Aa1.

Despite President Obama’s assurances that all that deplorable partisan gridlock will subside upon the event of a second term (as those spiteful Republicans will no longer be focused on thwarting his reelection, or something), I’m somehow not infused with confidence about his leadership abilities, nor his political will to do anything meaningful about the problem — seeing as how it’s his presidency that’s produced nonstop trillion-dollar-plus deficits. Blergh.