Fed pays near-record billions to US Treasury

The Federal Reserve said Tuesday it had paid $76.9 billion to the US Treasury from its estimated 2011 earnings, mainly income from interest collected on a range of securities. The amount was only three percent below the 2010 record payment of $79.3 billion, and reflected the extraordinary actions the Fed has taken to prop up the economy after the 2008 financial crisis. Most of the 2011 earnings came from $83.6 billion in interest income on government-linked securities, such as US Treasury securities, the central bank said in a statement. The bank\'s balance sheet has ballooned since the Fed launched massive asset purchases to support growth following the 2008 financial crisis that led to the worst recession in decades. The Fed has acquired $2.3 trillion in securities since the Lehman Brothers bankruptcy in September 2008, trying to lower long-term interest rates and support the distressed housing sector. Under Fed policy, the 12 regional banks in the federal reserve system pay the US Treasury their net income after certain costs are deducted, including for operations and dividend payments. At the end of the US government\'s 2011 fiscal year on September 30, the federal budget deficit stood at $1.3 trillion, about 8.7 percent of the nation\'s gross domestic product, a broad measure of economic output. The Fed said the $76.9 billion number was preliminary and based on unaudited results. Final results were to be published in the central bank\'s full-year audit, usually released in March.