The federal government ran a lower budget deficit this August than a year ago, remaining on track to record the lowest deficit for the entire year since 2008.
The August deficit was USD 128.7 billion, down 13 per cent from the USD 147.9 billion deficit recorded in August 2013, the Treasury Department said today in its monthly budget report.
With just one month left in the budget year, the deficit totals USD 589.2 billion, 22 per cent below last year's 11-month total.
The Congressional Budget Office expects the government to run a sizable surplus in September that will allow the government to close out the budget year with a deficit of USD 506 billion, the lowest since 2008.
The improvement this year has occurred because of a 7.7 percent increase in tax revenues that offset a smaller 0.8 percent increase in spending.
Revenues have been boosted by an improving economy and a tax increase that started taking effect in January 2013 that raised taxes on upper income individuals and eliminated a tax break workers had been getting on their Social Security taxes in the aftermath of the Great Recession.
On the spending side, outlays have been restrained by efforts to get control of soaring budget deficits and by an improving economy which has cut spending in such areas as unemployment benefits and food stamps.
With one month remaining in this budget year, outlays total USD 3.25 trillion while revenues total USD 2.66 trillion.
If the deficit comes in at USD 506 billion as CBO is forecasting, that would be 26 per cent below last year's imbalance and the lowest annual total since the 2008 deficit of USD 458.6 billion.
