U.S. Faces $1 Trillion Deficit

The US government's extraordinary effort to rescue the banking system may have pulled America's economy back from the brink, but it comes at a cost — helping to push an already bloated deficit up to an estimated $1 trillion for this fiscal year. That would be a record in today's dollars — and would represent the highest level of federal red ink as a share of the overall economy of any US budget since the 1940s. As a result, future presidents may have to rein in spending and raise taxes to pay down that debt. If they don't, foreign lenders at some point could scale back their purchases of US debt, sending interest rates soaring.