National Debt Approaching $100 Billion

May 20, 2002

WASHINGTON — The Treasury Department's latest figures, released Monday, show the government running a deficit of $66.5 billion for the first seven months of the budget year, which began last Oct. 1.

The turnaround from last year's surpluses reveals that the projected deficit offered by the Bush administration during his February budget submission appears on target to surpass $100 billion.

Fueled by a war on terror, increased costs of homeland security, and a mild recession in 2001, administration officials admit the shortfall will be the first in the last five years. The budget ran at a $165 billion surplus in the previous October-April period.

According to Treasury figures, government spending for October 2001-April 2002 totaled $1.18 trillion, an 8.7 percent increase over the same period last year. Total revenues this budget year so far are $1.12 trillion, a 10.9 percent decline from the corresponding period a year ago.

Democrats plan to make political hay out of the numbers, arguing that President Bush's 10-year, $1.35 trillion tax cut passed by Congress last year is the primary culprit in the shortages.

The Congressional Budget Office said weaker federal tax collection is also a factor in the worsening budget picture.

Revenues from individual income taxes have totaled $536.5 billion this budget year, an 18.6 percent decrease for the same period in the previous fiscal year.

Corporate income tax receipts dipped to $88.2 billion during the time frame, down from $103.3 billion during the same period a year earlier.

The Treasury did post a $67.2 billion surplus in April, attributable to income tax payments due at that time of year. Still the number is just over a third of the $189.8 billion collected in April 2001, and the lowest collection since 1995.

Individual income tax payments came to $137.3 billion in April, a 37.6 percent drop from the same month last year. Corporate tax payments totaled $9.8 billion, compared with $23.7 billion.

The largest expenditures were Social Security at $280.4 billion; Health and Human Services Department programs, including Medicare and Medicaid at $266.3 billion; military spending at $187.2 billion; and interest on the public debt at $181.2 billion.

For all of fiscal 2001, which ended Sept. 30, the government had a budget surplus of $127 billion, about half the previous year's record total of $237 billion.
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