Deficit Defies Law, Reaches $220.7 Billion

The federal government amassed a record $220.7-billion deficit in the fiscal year that ended Sept. 30 despite enactment of major deficit reduction legislation, the Reagan Administration reported today.

The government took in $769.1 billion in receipts and paid out $989.8 billion in expenditures, the Treasury Department and the White House Office of Management and Budget said in a joint report.

That produced an $8.8-billion increase in federal red ink over the previous record deficit of $211.9 billion in fiscal 1985.

There have been deficits in 25 of the past 26 years, running up a total accumulated national debt of $2.2 trillion.

Servicing that debt cost U.S. taxpayer’s $187.1 billion in fiscal 1986, another record and up from the $178.9 billion in interest payments in the previous year, the report said.

4.2% Increase

Today’s accounting contained the final figures for the 1986 deficit. Parts of the report had been released previously.

Although the fiscal 1986 deficit represented a 4.2% increase over the year before, it was $9.5 billion below the $230.2 billion that the budget office had estimated for the year as recently as August.

Economists both in the government and in the private sector have predicted that the deficit will come down in fiscal year 1987--even without additional spending cuts by Congress--to the vicinity of $170 billion.

The record 1986 deficit came despite enactment during the past fiscal year of the Gramm-Rudman deficit reduction act and of nearly $12 billion in spending cuts made under it. The law calls for a balanced budget by 1991.