WASHINGTON, Jan 17 (Reuters) - The U.S. government’s net liabilities swelled by $1.3 trillion during fiscal year 2012 due to increased commitments on government debt and federal benefits, a U.S. Treasury report showed on Thursday.
At a time of contentions political debate over the budget, the Financial Report of the United States Government, which applies corporate-style accounting methods to Washington, showed the government’s liabilities exceeded assets by $16.101 trillion, compared with a $14.785 trillion gap a year earlier.
Unlike the normal measurement of government intake of receipts against cash outlays, these “accrual” accounting standards measure costs - such as interest on the debt and federal benefits - payable when they are incurred, not when funds are actually disbursed.
The government’s net operating cost, or deficit, in the report edged marginally higher to $1.316 trillion for the 12 months ended Sept. 30 from $1.313 trillion the prior year.
That differs from the deficit reading released in November by the Congressional Budget Office of a $1.089 trillion for the same period.
The report was instituted under former Treasury Secretary Paul O‘Neill, the first Treasury secretary in the George W. Bush administration, to illustrate the mounting liabilities of government entitlement programs like Medicare, Medicaid and Social Security.
If left unaddressed, current spending and taxation patterns would lead to a ballooning of the primary deficit, which excludes interest payments, starting around 2020, the Treasury said.
“The President and Congress will continue to work to reduce future budget deficits,” Treasury Secretary Timothy Geithner said in a letter accompanying the report.
However, he warned that fiscal issues should be resolved without compromising economic growth.