US Government Spiraled Deeper into Debt This Fiscal Year

The U.S. government fell deeper into the red in fiscal 2011 with net liabilities swelling more than $1 trillion as commitments on government debt and federal benefits rose, a U.S. Treasury report showed on Friday.

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The Financial Report of the United States, which applies corporate-style accrual accounting methods to Washington, showed the government's liabilities exceeded assets by $14.785 trillion. That compared with a $13.473 trillion gap a year earlier.

However, the government's net operating cost, or deficit, in the report dropped to $1.313 trillion for the year ended Sept. 30 from $2.080 trillion the prior year, largely reflecting a drop in expected future payments under government pension programs.

"Restoring fiscal $1.313 trillion sustainability will require substantial additional changes, including tax reforms to increase revenue and changes to make our entitlement programs sustainable over time," U.S. Treasury Secretary Timothy Geithner said in a letter accompanying the report.