- The Washington Times - Sunday, October 17, 2010

The federal deficit shrank slightly in fiscal year 2010, but on most other measures, it was a dark year for the government’s fiscal health.

Social Security’s basic trust fund paid out more than it received for the first year in decades, overall basic spending was up by 9 percent, and if it weren’t for money paid back by the end of the Wall Street bailout the deficit would have broken 2009’s record.

The government has now run a deficit for 24 straight months, reaching back to the end of the Bush administration. That streak is by far the longest period of red ink in Treasury statistics that go back to the beginning of the Reagan administration.

September’s deficit was $34.5 billion, and it brought the total deficit for fiscal year 2010, which ended Sept. 30, to $1.294 trillion — the second-highest total on record, behind 2009’s staggering $1.416 trillion figure.

Still, September’s shortfall was the lowest since April 2009, and while individual income- and payroll-tax receipts were down in 2010, corporate income-tax collections shot up dramatically. With stimulus payouts having peaked and begun to decline, the Obama administration predicted better times ahead.

“Thanks in large part to the tough decisions this administration made over the past two years, the economy is recovering, and we’re spurring economic growth and job creation,” Jeffrey Zients, acting director of the White House Office of Management and Budget, said Friday in announcing the final 2010 figures.

Mr. Zients said President Obama is committed to producing a budget that will try to cap non-security discretionary spending in 2012 — continuing a pledge he made for fiscal year 2011.

If that does happen, it would be a major break with last year.

Basic federal spending grew at 9 percent in 2010, according to the Congressional Budget Office, which said the rise was “somewhat faster than in recent years.”

“While families across our country continue to struggle to pay their bills, Democrats in Washington continue to spend and borrow at dangerous levels,” said Sen. John Thune, South Dakota Republican.

One major factor in the deficit jump was payments of interest on the national debt, which CBO, in a preliminary analysis earlier this month, said grew at 13 percent in 2010. As of Thursday, the country’s total debt stood at $13.607 trillion.

Treasury’s final fiscal year-end statement showed spending rose across a host of programs. Of 28 major departments or agencies that make up the government, 21 saw increased outlays in 2010.

The biggest jump came in the Education Department, which paid out $92.9 billion in 2010, or up nearly 75 percent from 2009. The Labor Department also saw a substantial jump of 25.1 percent to $172.9 billion. The Defense Department, meanwhile, grew by about $30 billion, to $666.7 billion — a 4.7 percent rise.

The seven departments or agencies that spent less were Housing and Urban Development, the Treasury, the president’s executive office, NASA, the Office of Personnel Management, military retiree benefits, and the Homeland Security Department — which saw a large drop in emergency disaster spending.

Meanwhile, Social Security paid out more than it took in this year, for the first time in decades. Receipts for the Federal Old-Age and Survivors Insurance Trust Fund were $540 billion — nearly $40 billion short of the $579.9 billion paid out.

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