The federal deficit will register $260 billion this year, the lowest in four years, reflecting a strong economy and resulting growth in tax revenue, congressional analysts said Friday. The estimate by the nonpartisan Congressional Budget Office is well below its earlier predictions and also below the $296 billion White House estimate less than a month ago. Better-than-expected revenues are driving the deficit down from last year's $318 billion figure and far below the record $413 billion posted in 2004. At $260 billion, it would be the lowest since the $158 billion figure in 2002, the first deficit following four years of surpluses.| “At 2 percent of gross domestic product, the 2006 deficit would be smaller than the deficit recorded in the past three years...” |
So far this year, taxes on corporate profits are 27 percent or $56 billion higher compared to the first 10 months of last year. That reflects the strong economy. All told, receipts from corporate profits are estimated to tally two and a half times those collected in 2003, CBO said. The budget year ends Sept. 30. Receipts are also 20 percent higher on income and payroll taxes paid quarterly by wealthier people and small businessmen but taxes withheld in paychecks are only 8 percent higher. Tax receipts are estimated to run $223 billion higher than 2005, CBO said.