U.S. Deficit to Fall to $642 Billion, Says Budget Agency
By Brian Faler - May 14, 2013 2:14 PM ET
The U.S. budget deficit will shrink this year to $642 billion, the smallest shortfall in five years, according to a report released today by the nonpartisan Congressional Budget Office.
The CBO reduced its estimate of the likely shortfall, citing stronger-than-expected tax receipts. In February, it had projected a $845 billion deficit for the 2013 fiscal year, which ends Sept. 30.
The government ran its widest surplus in five years last month, with revenues up 28 percent compared with April 2012, according to the Treasury Department.
Last year’s deficit was $1.1 trillion.
This will be the first time since 2008 that the gap between taxes and spending has totaled less than $1 trillion.
Next year’s deficit will further shrink to $560 billion, the CBO said.
The brighter outlook will help postpone the effective deadline this year for raising the government’s debt ceiling, and may ease demands from some lawmakers for tough budget cuts. House Republicans are scheduled to meet tomorrow for two hours to consider their strategy for the upcoming debt-limit fight.
The revised estimate is the latest in a string of good news on the budget. The government ran its widest surplus in five years last month, with revenues up 28 percent compared with April 2012, according to the Treasury Department.
For the first seven months of the government’s fiscal year, the deficit shrank 32 percent to $487 billion from the same period last year. Last week, the government-owned mortgage financier Fannie Mae announced it would remit $59 billion in dividends to the Treasury.
Goldman Sachs Group Inc. (GS) has twice cut its deficit projections this year and said last month that it expects a shortfall of $775 billion.
To contact the reporter on this story: Brian Faler in Washington at bfaler@bloomberg.net
To contact the editor responsible for this story: Katherine Rizzo at krizzo5@bloomberg.net
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