U.S. budget deficit hit record $221 billion in February
Even in an era when we’re supposed to be used to huge federal budget deficit numbers, February's was a monster: $221 billion, the largest monthly deficit ever in gross dollars.The figure was disclosed by the Treasury Wednesday in its monthly update on the government’s finances. Last month’s deficit was up 14% from the $193.8-billion gap in February 2009.
The deficit so far in this fiscal year (which began in October): $651.6 billion, up 10.5% from $589.7 billion in the same period of the previous fiscal year.The government spent $328.4 billion in February while taking in taxes and other revenue of just $107.5 billion.
There was some relative good news in the report: Total taxes and other revenue were up 23% from a year earlier, a bigger percentage increase than the 17% rise in outlays.
But as Uncle Sam goes deeper into debt to finance the deficits, the interest bill is climbing: Total interest paid on Treasury securities was $16.9 billion for the month, up from $10.3 billion in February 2009.
Still, fears that the U.S. would have trouble finding investors to buy its massive ongoing wave of new debt have proved unwarranted so far.
On Wednesday the Treasury sold $21 billion in 10-year notes at an annualized yield of 3.74% amid solid demand. Investors put in $3.50 in bids for every $1 in notes offered.
The 10-year T-note yield is below the 3.84% level where it began the year.The Treasury will sell $13 billion in 30-year bonds Thursday.
-- Tom Petruno
Photo: The Treasury building in Washington. Credit: Evan Vucci / Associated Press