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Deficit reflects difficult challenge

The Treasury Department's announcement Monday that the government deficit this year topped $1 trillion was not a surprise; the Obama administration estimated in May that the annual deficit would reach about $1.84 trillion by the end of the fiscal year. Still, breaking the trillion-dollar barrier is a serious concern and reflects the difficult challenge of trying to prime the economy without crippling it in the longer term. One big worry about a large deficit is that it could increase interest rates, but so far that hasn't been a problem. Also, demand for buying Treasury debt has remained strong, which is fortunate. But the high deficit could pose political problems for President Obama, as lawmakers may be more leery of health care reform or other costly legislation.

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