The federal budget deficit is on pace to break the $1 trillion mark for the third consecutive year, putting even more pressure on the White House and Congress to reach a deal to cut spending.
The Treasury Department said the deficit is already at $971 billion for the first nine months of the budget year.
This year's deficit will likely top last year's nearly $1.3 trillion gap but come in below the record $1.4 trillion reached in 2009.
Much of the improvement from last year was because of a one-time drop in the estimated cost of education loans.
But the government is also receiving more tax revenue this year, which reduces the deficit a bit.
Revenue rose 9 percent, or $137 billion through June, the Treasury's report said.
Government spending has also risen this year. Interest on the national debt rose 9 percent to $386 billion in the first nine months of this year. Thats compared to the same period last year, one of the largest increases in spending.
Spending on Medicare, Medicaid, and Social Security benefits also increased, according to the report.