Due to billions spent in bailouts for financial firms and a decrease in tax revenue, the Congressional Budget Office said last week that the federal deficit grew by an astounding $181 billion dollars, bringing the total deficit up to $1.3 trillion.
The CBO estimates that the deficit will top $1.8 billion by fiscal year’s end.
A 21 percent increase in spending accounts for the majority of the added deficits in just a year’s time, which brings the total to $880 billion higher than this time in fiscal year 2008.
“The estimated deficit reflects outlays of about $169 billion for the Troubled Asset Relief Program (TARP), recorded on a net-present-value basis adjusted for market risk, and net cash payments of $83 billion in support of Fannie Mae and Freddie Mac,” the CBO said in a summary of its findings.
“CBO estimates that spending increases and revenue reductions stemming from the American Recovery and Reinvestment Act of 2009 (ARRA) have totaled more than $125 billion so far this year (excluding the impact on the budget from the effects that the legislation has had on the economy).”
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