ASSOCIATED PRESS
The deficit for the first five months of the budget year is down sharply from a year ago as the growth in government tax collections continues to outpace growth in spending.
The Treasury Department reported that the deficit from October through February totaled $162.2 billion, down 25.5 percent from a comparable period last year.
The improvement was recorded even though the deficit in February hit $120 billion, up 0.6 percent from a deficit of $119.2 billion in February 2006.
One factor that contributes to higher deficits in February are the refund payments that the Internal Revenue Service mails during the month to people who have filed early tax returns. The February 2006 imbalance was the largest monthly deficit for that year.
In the current budget year, which began on Oct. 1, the government had larger-than-expected surpluses in December and January.
For the first five months of the budget year, revenues are up by 9.3 percent to a record $954.4 billion.
Spending for the period also set a record at $1.117 trillion, but that 2.3 percent rise was slower than the growth in revenues, resulting in a lower deficit.
The Bush administration is forecasting that the deficit for this year will total $244 billion, a slight improvement from the $248.2 billion actual deficit for 2006.
However, the Congressional Budget Office is more optimistic, forecasting that the deficit for the current budget year should decline to $214 billion. That forecast assumes that Congress will approve President Bush’s supplemental spending request for the war in Iraq.
The $248.2 billion deficit for 2006 was the smallest deficit in four years and down significantly from the all-time high, in dollar terms, of $413 billion in 2004.
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