October's Record Deficit

The Treasury Department announced Thursday that the deficit for October weighs in at $176.4 billion—the highest October deficit ever, the fifth-largest monthly deficit of all time, and the 13th-consecutive month to show a deficit. The most significant reason for the high deficit was the lower tax receipts, which came to $135.3 billion, a 17.9 percent drop from October 2008. The Obama administration has said that this year's deficit is expected to reach $1.5 trillion, the third record annual deficit in a row, and, according to its estimates, the deficit will not come in less than $738 billion over the next 10 years. Some economists are concerned that the growing deficit might lead to higher interest rates, making borrowing more expensive, or scare away foreign investors buying Treasury debt; meanwhile, Congress will likely need to raise the government's debt limit higher than its current level of $12.1 trillion, which the White House says it will hit in December.