Feds’ deficit streak hits record 33rd straight month

The federal government notched its 33rd straight month in the red in June, extending its record deficit streak to three times the previous low-water mark, according to preliminary estimates Friday from the Congressional Budget Office.

But lower spending, thanks in large part to less money going to Fannie Mae and Freddie Mac, shrank the deficit to just $45 billion in June — down from $68 billion last year.

And with three months to go still in fiscal year 2011, the government has racked up $973 billion in total deficits, a pace which is slightly better than 2010, when the government had just crossed the $1 trillion mark at this point.

The figures come as lawmakers are trying to hash out a deal on long-term reduction to the country’s skyrocketing debt.

CBO analysts said interest on the debt accounts for an ever-increasing share of spending: $31 billion in June alone, and $202 billion for the first nine months of the fiscal year, which is 18 percent higher than 2010.

The government has run a deficit for 33 straight months, dating back to October 2008, when then-President George W. Bush and Congress began to grapple with the financial crisis.

That’s the longest streak since the Treasury Department began keeping records in 1980.

CBO said the payroll tax cut Congress and President Obama agreed to last year is biting into revenue, which accounts for part of the slight drop in government income last month, compared to 2010.

Overall, though, income tax collections are up 24 percent, and total tax collections are up 8.5 percent higher in 2011 compared to last year, signaling that economic growth is helping the government’s bottom line somewhat.