The U.S. budget deficit rose in October, the first month of fiscal year 2013, as looming negotiations over expiring tax cuts and imminent spending reductions dominated the post-election political landscape.
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The Treasury said on Tuesday the October deficit was $120 billion, larger than economist forecasts for a $114 billion gap and up from $98 billion in October of 2011.
Growth in expenditures outpaced rising receipts, deepening the deficit. Outlays grew to $304 billion from around $262 billion in the same month last year while receipts rose to $184 billion from $163 billion.
Following President Barack Obama's election to a second term last week, the debate in Washington has quickly shifted to the combination of expiring tax breaks and new spending reductions known as the ``fiscal cliff.''
Lawmakers involved in the debate gathered in Washington on Tuesday for the first time since the elections, setting the stage for a week of trial balloons and rhetorical repositioning.
The U.S. Congress has just returned from a break after the Nov. 6 elections. Topping the agenda is the year-end convergence of urgent tax and spending issues that, if mishandled, could plunge the economy into another recession.
The United States had reported a budget surplus for September, the final month of the 2012 fiscal year, but the tiny bump in revenues did not prevent the country's deficit from exceeding $1 trillion for the fourth year in a row.
The 2012 budget gap was $1.089 trillion, smaller than last year's deficit of $1.297 trillion largely because of higher corporate income tax receipts and less spending.